Burger joints have lost some of their sizzle over the last couple of months.
After two consecutive quarters of surprising growth, fast food companies, including McDonald’s and Wendy’s, are seeing growth slow as consumers tire of the chains’ cheap thrills — like All Day Breakfast and 2-for-$5 promotions, according to industry experts.
“The bundled meals aren’t so new anymore, and McDonald’s All Day Breakfast is about six months old now,” said Nomura analyst Mark Kalinowski, who on Thursday lowered second-quarter estimates for sales at Wendy’s and McDonald’s. He also lowered profit estimates for McDonald’s second and third quarters.
Nation’s Restaurant News reported that customer traffic at all fast-food restaurants rose just 0.3 percent in April, while same-store sales rose 0.6 percent.
In general, the restaurant industry has been growing more slowly and began a decline in February when same-store sales gains peaked at 3 percent — before decelerating to 0.7 by April, according to MillerPulse, which tracks industry statistics.
Fast-food eateries have been the outliers, with Wendy’s 3.6 percent same-store sales increase in the first quarter and McDonald’s 5.4 percent increase over the same period. But that may be changing.
Kalinowski expects same-store sales growth at McDonald’s to slow to 3 percent and Wendy’s to slow to 1.5 to 2 percent.
“Fast food chains are not sliding off of a cliff, but it may be that independent restaurants are gaining some market share,” said John Gordon, of Pacific Management Consulting Group.