Wendy’s CEO Blames Rising Inflation, Falling Wages, Election Mayhem for Restaurant Sector “Slowdown”
by Wolf Richter
WolfStreet.com
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
