According to Revenue Management Solutions, the LA wildfires and freezing weather in January put pressure on fast food sales.
The increase in fast food sales in December was 4.9%.
Quick service restaurants (QSRs) are confident that things will improve in the second half of 2025, despite the fact that the first quarter may be weak.
The Invesco QQQ trust, Series 1 is an exchange-traded funds (ETFs) that tracks the US QSR industry. It has gained more than 5% since the beginning of the year.
Fast-food sales are also affected by consumer caution
The US consumer’s cautious attitude under Trump’s administration was another factor that affected fast-food sales in November.
“They are waiting to see what the economy will do, but they also don’t want to sacrifice the quality and quantity of the food they eat.” Doug Fry, the US President of Subway, told CNBC that they want to get the best value for their dollar.
Many people believe that the new tariffs could trigger a trade war.
Consumers are worried that Trump’s tariffs will increase prices and put more pressure on their wallets.
In January, the inflation rate was higher than expected at 3.0%. This caused the US consumer sentiment to fall further, reaching a seven-month-low in February.
QSR allows for easier comparison with H2
The QSR sector, which has had a weak start in 2025, is expected to improve in the second half this year mainly due to easier comparisons.
In every month except November, the number of people visiting fast-food restaurants has decreased.
According to Ian Borden, McDonald’s chief financial officer, if consumers become more confident over the course of the year, sales will increase even more.
If the underlying environment improves beyond our initial expectations, particularly with respect to lower income consumers, we expect to benefit disproportionately compared to our competitors.
McDonald’s stock is up about 10% since the middle of January.
Starbucks also sees improvement in the future?
Starbucks, which has been struggling with a comparable sales decline for the past four quarters, expects to see signs of improvement in the second half of this financial year.
Rachel Ruggeri, the chief of finance of the world’s largest coffeehouse chain, did mention a pickup in the second half of the year during the most recent earnings conference.
She told investors that “EPS is expected be the lowest on an absolute basis in fiscal Q2 due to seasonality and organisation restructuring. YoY pressure has also intensified in the quarter.”
Wall Street has currently given Starbucks stock a consensus rating of “overweight”.
This post Fast food sales declined in January: Will 2025 be a difficult year for QSRs? This post may be updated as new information becomes available
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