As consumers cut back on spending, two exchange traded funds (ETFs) caught in the crossfire could be ones focused in leisure and entertainment, and food and beverage.

Bennigan’s filed for bankruptcy this week, putting hundreds out of work while leaving yet more empty real estate in a time when we can ill afford it, reports Michael Grynbaum for the New York Times. The company’s sister brand, Steak & Ale, will also be closing.

The fact that many share similar concepts appears to be biting the chain restaurants where it hurts, too: T.G.I. Friday’s, Ruby Tuesday, Bennigan’s and others at times appear to be indistinguishable in both menu options and decor. That makes it difficult to establish brand loyalty.

The casual dining sector has taken a hit overall as budgets tighten and there’s less cash available for entertainment spending. They’re considered a notch above fast food, which is one area that has done okay in the downturn. Many fast food restaurants have offered deals, such as expanded dollar menus or offerings such as $5 sandwiches at Subway and Quizno’s.

The cheap menu paid off for McDonald’s (MCD), which reported a profit in its second quarter, largely based on overseas sales, MarketWatch reported. But they told analysts that rising beef prices in the United States might put the squeeze on the company this year, as they believe prices will rise as much as 9%.

Yum Brands (YUM) also reported stronger sales growth, fueled by overseas sales. Yum doesn’t own any of the casual dining brands that are closing. It operates A&W, KFC, Long John Silver’s, Pizza Hut and Taco Bell.

Yum and McDonald’s make up 5.7% and 5.4% respectively of the PowerShares Dynamic Leisure & Entertainment (PEJ). They’re also holdings in the PowerShares Dynamic Food & Beverage (PBJ) - McDonald’s is 5.2%, and Yum is 5.4%. PEJ is down 18.3% year-to-date, while PBJ is off 7.1% year-to-date.

Tags | Food & Beverage, Leisure & Entertainment, PBJ, PEJ