Wendy’s CEO Blames Rising Inflation, Falling Wages, Election Mayhem for Restaurant Sector “Slowdown”

Thursday, August 11, 2016
By Paul Martin

by Wolf Richter
August 10, 2016

Consumers at the “low end” are tapped out.

Restaurants are considered a leading indicator of the economy into a downturn. The theory is that restaurant revenues are slowing when consumers, whose spending accounts for about 70% of GDP, start having trouble with their wallets.

Some call the current situation a “restaurant recession.” Wendy’s, in its earnings call today, calls it a “recent slowdown.”

Others don’t see it that way quite yet. If you’re trying to walk into one of the amazing restaurants in San Francisco on a Saturday night, you might be disappointed when you find out that the “restaurant recession” has failed to reserve a table for you.

The Restaurant Performance Index, released at the end of July, was equally ambivalent. Business isn’t falling off a cliff yet, but it doesn’t look good either, with the overall index having declined to 100.3 in June (above 100 = expansion), “as a result of softer sales and a dampened outlook among operators.”

“The uneven trend” in the first half, it said, “was due in large part to choppy same-store sales and customer traffic results.”

The Rest…HERE

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