Fast Food’s Biggest Threat: Grocery Stores

Grocery prices are dropping due to lower commodity costs, and people are eating at home more often as a result. Wendy’s recently became the latest latest fast-food restaurant to report slowing sales growth. Same-store sales in North America rose 0.4% in the second quarter, missing the 1.9% rise that analysts had expected.

Wendy’s CEO Todd Penegor blamed the weak growth on the fact that more people are eating at home. McDonald’s has also blamed falling grocery prices for the company’s recent sales slowdown.

“If I’m not mistaken, it’s the biggest gap we’ve seen [between food at home and food away from home] in the last 10 years,”McDonald’s USA President Mike Andres said last week. “This is clearly impacting the whole eating out industry.”

Burger King, Yum Brands, and Sonic have also reported sales slowdowns.

In fact, restaurant sales have been so lackluster this year that one Wall Street analyst thinks that they may be a “harbinger” for a US recession next year.

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