In addition to general discontent and upheaval, the 2016 presidential election is now apparently causing a slowdown in fast-food restaurant sales, or so the CEO of Wendy’s believes. Todd Penegor noted in an earnings call that uncertainty can cause people to cut back on spending, CNBC reports.
"When a consumer is a little uncertain around their future and really trying to figure out what this election cycle really means to them, they're not as apt to spend as freely as they might have even just a couple of quarters ago," he said.
Penegor may not be too far off, either: same-store sales for Wendy’s went up only .4 percent in the second quarter, and McDonald’s sales increases were also lower than projected, coming in at 1.8 percent instead of the anticipated 2.4. Recently, Stifel Nicolaus analyst Paul Westra observed a decline in restaurant traffic as sales at burger chains fall below estimated earnings. This trend could be a signal of forthcoming recession or a byproduct of the American political climate.
However, pizza sales happen to be up right now, with Papa John’s reaping the benefits and showing a 4.8 percent increase. Domino's sales in the second quarter were also strong, increasing nearly 10 percent from the previous year, Bloomberg reports. The advantage for pizza chains may lie in the pricing: a $7.99 pizza can feed a family, and the low cost of ingredients leaves chains with a larger profit margin.
• Wendy's CEO: Presidential election hurting burger sales [CNBC]
• Are Dwindling Restaurant Sales the Sign of a Recession? [E]
• Is Pizza Recession-Proof? [E]
• How McDonald's Hopes to Sustain Its All-Day Breakfast Success [E]