The Financial Times article titled "What fast food’s downturn says about the US economy" (published February 10, 2026) examines how struggles in the US fast-food sector reveal broader economic pressures, particularly on lower-income consumers.
Key takeaways:
- Fast-food chains are hurting: Major players like Wendy's (share price down 48% in the past year, hundreds of store closures after repeated revenue drops), Pizza Hut (3% US sales decline, hundreds of closures, potential sale by Yum! Brands), McDonald's, and Burger King are seeing fewer visits and sales weakness. Only 9% of quick-service restaurants reported positive traffic growth year-over-year—the lowest among restaurant categories.
- Low-income consumers are pulling back: Facing high living costs, many are eating at home, choosing groceries, or occasionally splurging on upscale dining instead. Examples include a hospital worker opting for home cooking over a $14 Wendy's meal and complaints about extra fees (e.g., 25 cents for sauce). US consumer confidence recently hit a 12-year low.
- Price increases backfire: Restaurant prices for eating out have risen much faster than home cooking (52% vs. 30% since 2015), with menu prices up 4.1% in the past year. This stems from surging labor costs (median fast-food wage $14.65/hour, California's $20 minimum wage law), ingredient inflation (beef prices up 16% last year, more rises expected), and other pressures.
- Economic divide highlighted: The article argues this reflects a bifurcated US economy—businesses reliant on low-income customers (including fast food, farming, and real estate) are lagging, while sectors serving affluent consumers (e.g., fine dining, data centers, energy) perform strongly.
- Industry responses and outlook: Chains are fighting back with promotions (e.g., McDonald's Extra Value Meals, recent same-store sales gains), limited-time offers, and operational tweaks (e.g., Wendy's "Project Fresh"). Early 2025 shows some traffic improvement, but persistent inflation, labor shortages, and softening job market signals suggest challenges remain.
Overall, the piece uses the fast-food slowdown—once a symbol of affordable, efficient meals for working-class families since McDonald's 1948 innovation—as a lens into how inflation and cost-of-living pressures are unevenly squeezing the bottom of the income ladder. |
