Wendy’s is the latest major fast-food chain to report weaker-than-expected sales growth, with the hamburger company saying people aren’t dining out as much because it has gotten even cheaper to eat at home, The Associated Press reports.
The chain, which has seven locations in Baton Rouge, says sales edged up 0.4% at North American restaurants open at least 15 months in the second quarter. Analysts polled by FactSet had predicted a 2.4% increase.
Wendy’s CEO Todd Penegor said during a conference call that customer traffic across the fast-food industry started to slip earlier this year as the price gap between eating at home and dining out widened. That’s because lower commodity costs have kept grocery prices down, while restaurant chains may maintain or raise prices as they deal with costs for running their businesses and try to improve profit margins.
Penegor said he’s confident that, over time, fast-food chains will continue taking customer traffic away from sit-down restaurants.
“We view this as a bump in the road,” he said.
Shares were down 1.5% to $10.04 as of 2:24 p.m. today.
The results from Wendy’s follow disappointing sales from other chains including McDonald’s, Burger King, Dunkin’ Donuts and Starbucks. The other chains have cited a variety of reasons, including the political uncertainty created by the presidential election, for their performance.
