BUZZ-US restaurant chains grapple with weak demand, value wars in 2024

Updates

The S&P 500 Restaurants sub index SPLRCREST has risen 2.7% so far this year, contrasting sharply with the 23.8% rise in the broader S&P 500 index .SPX

Higher restaurant menu prices in the United States led to muted consumer demand in 2024 and chains responded with value offerings to renew interest

Shares of McDonald's MCD.N down 2.3% YTD, as of last close, as the company reported two straight quarters of fall in global comparable sales

Shares of KFC parent Yum Brands YUM.N up 2%, while U.S.-listed shares of Burger King parent Restaurant Brands QSR.N down 16.9%

Domino's Pizza DPZ.N shares up 2%, Wendy's WEN.O down 16%, while Jack in the Box JACK.O down 48%

Chipotle Mexican Grill CMG.N shares up 31% on robust demand for its burritos, while shares of Shake Shack SHAK.N up ~74%

Mediterranean restaurant chain Cava Group CAVA.N, which made its stock market debut in June 2023, jumped 159% in 2024 on strong demand for its salad bowls and pita wraps

Shares of coffee chain Starbucks SBUX.O, which has contended with weak consumer traffic at its stores and replaced its CEO in a surprise move in August, saw shares fall 5.6% in 2024, marking its third straight year of decline

Sales trends have recovered from their weakness over the summer to a slightly positive trend in recent months, and we expect this underlying trend to continue into the first-half of the new year - BTIG analyst Peter Saleh

(Reporting by Juveria Tabassum in Bengaluru)

((Juveria.Tabassum@thomsonreuters.com;))