AN ICONIC CANARY IN THE COAL MINE?
Just when you thought it couldn't get much worse for McDonald's it did.
The six-month outlook for franchisees is at an all-time low, according to a small survey by Mark Kalinowski, a long-time restaurant industry analyst.
Franchisees, were asked to give their six-month forecast from 1 (poor) to 5 (excellent). The average response was 1.69, the lowest in the survey's history. Previously, the lowest rating was 1.81, which was recorded three months ago.
Their same-store sales fell 2.3 percent in June—2 full percentage points worse than Wall Street expectations, Kalinowski wrote. The respondents expect sales to fall 1.2 percent more this month, whereas analysts were assuming sales would rise.
"Corporate has no answers," one respondent said. "They are throwing ideas at the wall hoping something will stick. Their collective arrogance has come home to roost."
One respondent said, "At least half of the operators in my region are on the verge of collapse. With minimum wage for fast food workers potentially increasing to incredibly high levels, we are facing a crisis situation."