Stores are closing as companies move to shut down weaker-performing locations. For instance, McDonald’s intends to shutter about 500 stores from its supersized global restaurant network in 2016, and Burger King and KFC — under Yum! Brands — is heading towards the same direction as well.
Restaurant stock prices are decidedly bearish on the heels of a challenging environment. Stocks, including McDonald’s (NYSE: MCD), Darden Restaurants (NYSE: DRI), Panera Bread (NASDAQ: PNRA), Cheesecake Factory (NASDAQ: CAKE), BJ’s Restaurants (NASDAQ: BJRI) and Wendys (NASDAQ: WEN) are among the restaurant chains that led the stock market lower.
Examining the period from June 1 to August 4, stock prices of the abovementioned chains, collectively declined by 4.21%. Darden Restaurants slumped 9.46%, Wendys shed 4.81%, McDonald’s dropped 3.01%, Panera Bread fell 2.16% and Cheesecake Factory slid 0.28%. BJ’s Restaurants was the biggest loser, tumbling by almost 14%.
The upcoming election, terrorism and social unrest are usually the signs of worse things to come. In addition to the current weak pre-recessionary restaurant and fast food trend is likely to suggest that a restaurant recession could be a harbinger for a US recession in 2017. That, however, requires some time before we can fully make that call.
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