Starbucks, Pizza Hut, KFC and McDonald’s report first signs of economic crisis after sales drop

Starbucks, Pizza Hut, KFC and McDonald’s were among the chains that reported sizeable declines in same-store sales this quarter.

Starbucks announced a surprising drop in sales for its latest quarter, sending its stock down 17%. Pizza Hut and KFC also reported a decline in same-store sales

US fast food chain McDonald’s missed its quarterly profit target for the first time in two years as consumers became more budget-conscious and less deal-conscious and the conflict in the Middle East hurt international sales. For months economists have predicted that many consumers will cut back on spending in response to higher prices and interest rates. But it took some time for the fast-food chains to see their sales actually decline, despite several quarters of warnings to investors that those low-income consumers were slacking off and others were switching to more expensive options.

The cost of dining at quick service restaurants has risen faster than dining at home. Limited-service restaurant prices rose 5% in March from a year earlier, while food prices rose more slowly.