Wendy's CEO: Presidential election hurting burger sales
Is the presidential election to blame for weak burger sales? Wendy's seems to think so.
The burger chain is just the latest fast-food restaurant to blame Hilary Clinton and Donald Trump for a slowdown of same-store sales.
"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," Wendy's CEO Todd Penegor said in an earnings conference call on Wednesday.
Penegor isn't alone in his commentary. Other chains blamed November's election for poor burger sales, too.
Notably, McDonald's, which saw same-store sales in the U.S. rise 1.8 percent, a gain that sharply below analysts' expectations of 3.4 percent growth, according to FactSet.
"I think generally, there's just a broader level of uncertainty in consumers' minds at the moment, both trying to gauge their financial security going forward, you know, whether through elections or through global events, people are slightly mindful of an unsettled world," McDonald's CEO Stephen Easterbrook said in a July earnings call. "And when people are uncertain, when families are uncertain, caution starts to prevail and they start to hold back on spend."
Even the CEO of retailer HSN Inc., in an interview with CNBC, cited political uncertainty as a distraction to consumers. The company, which operates the Home Shopping Network and Cornerstone, saw a 4 percent drop in second-quarter sales.
"There haven't been too many facts that can prove that. It's a lot of speculation," Wedbush analyst Nick Setyan said of Wendy's blaming the election for a slowdown in sales.
Instead, he notes that there is another reason same-store sales are down — at least for restaurants.
"It has a lot more to do with the gap between food at home and food away from home," Setyan told CNBC.
And Wendy's did note that it took a hit from declining grocery prices, which it saw as a catalyst for diners opting to eat a home more often.
And it's not just the grocery chains. Convenience stores and meal delivery companies also are competing for a share of consumers' stomachs — and they can be cheaper alternatives, especially when food costs are falling.
"Restaurants are becoming less of a value relative to grocery stores," Setyan said.
Wendy's same-store sales in North America rose 0.4 percent in the second quarter, missing the 1.9 percent rise analysts polled by research firm Consensus Metrix had expected. The company cut its same-store sales forecast for 2016 to a range of 1 percent to 2 percent.