Slow tax refunds hurt restaurants

While death and taxes may be a certainty, how quickly Americans are getting their refunds remains up in the air — and that’s taking a toll on restaurants’ revenue.

Jack in the Box Inc. saw sales abruptly turn negative this month, and the slowdown may be partly due to delayed income tax refunds, Chief Executive Officer Lenny Comma said Wednesday. Cracker Barrel Old Country Store Inc. and Red Robin Gourmet Burgers Inc. also have cited anxiety over the issue.

The worries stem from legislation passed in 2015 that was aimed at preventing fraud but which also may postpone funds remitted to 25 million to 30 million U.S. households this year. All told, the income tax delay may crimp consumer spending by as much as $21 billion in February, Goldman Sachs said earlier this month.

“February has certainly been challenging for the industry,” Red Robin Chief Financial Officer Guy Constant said.