--- title: "Fast-food chain executives have low expectations for the economy" url: https://burnaze.com/article/c8993921-7e4e-491f-a73a-cf426b1fdc74 source: "Restaurant Business" original_url: https://restaurantbusinessonline.com/financing/fast-food-chain-executives-have-low-expectations-economy category: "Restaurants" industry: "Restaurants" published: 2026-10-14T15:36:58.000Z modified: 2026-10-31T14:43:41.944Z image: https://cdn.informaconnect.com/platform/files/public/2026-10/background/Domino%27s%20shutterstock.jpg?VersionId=LuI4bPgfh1KyJfVvpJ4PIoq5lNiW2O5i --- # Fast-food chain executives have low expectations for the economy **TL;DR:** Fast-food chain executives, including McDonald's CEO Chris Kempczinski and Domino's CEO Joe Jordan, have low expectations for the economy, citing flat industry traffic and elevated inflation. The industry's growth has been impacted by increased supply and waning demand, with traffic declining 2.6% in the third quarter. *originally published in Restaurant Business on 2026-10-14. [Read the original](https://restaurantbusinessonline.com/financing/fast-food-chain-executives-have-low-expectations-economy).* ## Story Anybody expecting a quick improvement in fast-food traffic isn’t getting much hope from some of the industry’s top executives. Last month, for instance, McDonald’s CEO Chris Kempczinski gave a dim view of fast-food sector traffic for the near-term future. “The industry growth algorithm is changing,” he said at the company’s Investor Day presentation. “We expect industry traffic in our wholly-owned markets will be flat, while inflation remains elevated.” On Tuesday, Joe Jordan, newly minted CEO of the world’s largest pizza chain, Domino’s, said roughly the same thing. “Looking ahead to the remainder of 2026, we expect the macro environment to remain an overhang on the consumer for the balance of the year,” he said. Generally speaking, McDonald’s and Domino’s have as much economic insight as any consumer company in the U.S. outside of Walmart and Amazon. If they’re suggesting that the economy will remain in its current state, at least as it pertains to the fast-food consumer, it’s a good bet they’re right. A certain subset of consumers is cutting back on dining at restaurants, either by eating more at home, or by visiting competing industries like convenience stores. Those consumers are under pressure after years of inflation. And any time it looks like things might turn around, something else happens to change that. This year, for instance, the Iran War has led to frustratingly high fuel prices, driving up costs everywhere and hurting consumer sentiment, which in turn is hurting traffic. The consumer price index rose 0.6% month-over-month in September, and 3.7% for the full year. Menu prices rose 3.5%, including 3.2% at limited-service restaurants. Consumer sentiment in October, according to the University of Michigan, declined 3.7%. It is down 13.6% compared with a year ago. All this has caught the industry flat-footed, given that many brands pushed intense growth coming out of the pandemic, believing that they would be the big winners in a takeout-and-delivery heavy future. Since 2022, according to data from Technomic, the number of fast-food units in the Top 1,500 chains grew 3.6% since 2022. This, despite massive bankruptcy filings and large-scale closures and Subway alone shutting down about 1,500 locations during the period. The combination of an increased supply and waning demand has put intense pressure at the unit level. Traffic in the third quarter declined 2.6%, according to data from Revenue Management Solutions. “Traffic has been flat for several years now,” Ian Borden, McDonald’s CFO, said in an interview following the company’s recent Investor Day presentation. “I think that’s partly because more capacity is being added in terms of new units than incremental customer demand, and I don’t think that’s going to change in the near-term.” Fast-food chains have pushed development at all costs and now face a tough environment that does not appear close to being truly fixed. To get traffic, they’ve pushed a lot of discounts, and the weak traffic and heavy reliance on value offers to get customers in the door, coupled with higher costs, have hurt unit economics. And that is interfering with the chains’ ability to get things done in the future. McDonald’s franchisee cash flow is down this year just as the chain is working to get operators to fund $800,000 worth of improvements on top of planned remodels. Domino’s, as my colleague Alicia Kelso pointed out, has seen development slow because franchisee cash flow has taken a hit with the heavy value focus. Domino’s same-store sales rose just 0.3%, but customers came in more frequently and ordered cheaper pizzas, which has hurt profitability. Both chains will need to find ways to improve store-level profitability if they’re going to expand. But you could probably say that about the bulk of the fast-food sector right now. ## Entities - unit expansion (topic) - QSR (sector) - McDonald's (company) - Domino's (company) - Restaurant Business (publication) - Technomic (company) - Alicia Kelso (person) - Chris Kempczinski (person) - fast food industry (topic) - Joe Jordan (person) - inflation impact (topic) - Ian Borden (person) --- Originally reported by Restaurant Business (https://restaurantbusinessonline.com/financing/fast-food-chain-executives-have-low-expectations-economy). Summarized by Burnaze (https://burnaze.com/article/c8993921-7e4e-491f-a73a-cf426b1fdc74).