America has a new lunch habit that's hurting McDonald's
Grocery prices have been falling, and as a result, a growing number of Americans are choosing to pack their lunches and eat dinner at home versus visiting restaurants, according to McDonald's CEO Steve Easterbrook.
"There is a widening gap between food away from home and food at home, where the commodity decreases are being passed through by the grocers," McDonald's CEO Steve Easterbrook said Tuesday on a call with analysts.
"So the food at home, there's value to be had for families there, whereas eating out, there is a price inflation environment."
Easterbrook made the remarks in response to a question about McDonald's slowing sales growth.
McDonald's same-store sales increased 1.8% in the second quarter of the year, down from 5.4% growth in the previous quarter.
Americans' overall uncertainty about the presidential election and the economy have also been contributing to a slowdown industry-wide, Easterbrook said.
McDonald's isn't the only restaurant affected by consumers' spending pullback.
In fact, same-store sales have been so lackluster this year that one Wall Street analyst thinks they may be a "harbinger" for a US recession next year.
In a note to clients published Tuesday, Stifel analyst Paul Westra said the slowdown "reflects the start of a US restaurant recession"and that it "may also represent a harbinger to a U.S. recession in early 2017."
"Restaurants have historically led the market lower during the three-to-six-month periods prior to the start of the prior three US recessions," he wrote.