Taken together, they paint a portrait of a cash-strapped consumer.
Sure, we still don’t have jobs numbers, but there’s a lot you can learn from a slop bowl.
A spate of fast food and fast casual restaurants reported earnings last week, including Cava and McDonald’s, while Chipotle reported the last week of October.
Taken together, they paint a portrait of a cash-strapped consumer, particularly on the lower end of the earnings spectrum, as job growth weakens.
True to this, not new to this. McDonald’s has often served as a harbinger of economic stress. And if comments from the company in the last year are any indication, low-income consumers continue to feel the pinch.
“We continue to see a bifurcated consumer base with [quick-service restaurant] traffic from lower-income consumers declining nearly double digits in the third quarter, a trend that’s persisted for nearly two years,” McDonald’s CEO Chris Kempczinski said on the company’s November 5 earnings call. “In contrast, QSR traffic growth among higher-income consumers remained strong, increasing nearly double digits in the quarter.”
That’s the K-shaped economy you’ve been hearing about. Kempczinski added that financial pressure on low-income consumers will likely continue into 2026.
“Right now, you’re seeing across the country, rents are at pretty high levels. You’re seeing food prices, whether it’s in restaurants or grocery, you’re seeing food prices are high, you’re seeing child care is high,” he said.
