Election uncertainty to plague restaurant industry through Trump's first 100 days

Donald Trump during Launch of Trump Steaks at The Sharper Image at The Sharper Image in New York City, New York.
Stephen Lovekin | WireImage for Hill & Knowlton
Donald Trump during Launch of Trump Steaks at The Sharper Image at The Sharper Image in New York City, New York.

Uncertainty sparked by this year's presidential election may not be easing up any time soon.

Restaurants like McDonald's, Starbucks and Wendy's blamed the election for slowing same-store-sales growth, and there are some reasons to expect that will continue even though the votes have been cast.

"Now that the election has occurred, I think there is still a lot of uncertainty given that Donald Trump hasn't really stated what his policies are. He [was] very vague during the campaign on what he is going to do," Joe Pawlak, managing principal at Technomic, told CNBC.

"I think what is going to happen, we are still going to see some slowness in the restaurant industry, probably the first 100 days of his administration, until we start seeing some actual action," he said.

Major restaurant chains like Dunkin' Brands and Ruby Tuesday, among others, reported weaker-than-expected same-store sales growth in previous earnings cycles. At the time, many cited competition with grocery stores and meal delivery programs, higher menu prices and the election as major headwinds for sales growth.

While the election is over, the softness will continue for the majority of the industry, especially for casual dining or "sit down" restaurants, Pawlak said.

"With restaurants it's very much a discretionary spend. I think most people will be cautious, because again they are not quite sure what's going to happen," he said. "Fifty-one percent of the country didn't vote for Donald Trump and want to see what he comes up with, so I still think there will be softness in the fourth quarter for the restaurant industry."

U.S. consumer spending fell in both August and September, Reuters reported.

"Now that the election is over, things should partly return to normal and consumers should loosen the purse strings a bit more," Neil Saunders, CEO of Conlumino, told CNBC. "This will help restaurants and will lift spending moderately. That said, the end of the election does not spell the end of all uncertainty: This is a time of change for many and quite a number of consumers are concerned about the impact of a Trump presidency. This may well create a ceiling of growth."

Pawlak predicts that sit-down restaurants will see sales flat or lower than expected for the full year, but that fast food chains will fare a little bit better. He noted that consumers will "trade down when there is uncertainty" and gravitate to the lower check average.

"There are other underlying issues that go beyond the election," Pawlak added, explaining that the industry has become highly saturated and some non-fast food restaurants are "pricing themselves out the market."