US restaurant chains fail to shake off consumer blues, margin pressures

S&P 500 Restaurants sub index .SPLRCREST down 1.3% YTD vs a 17.3% rise for the broader S&P 500 index .SPX

Weak spending by younger customers and middle-income households hurt chains such as Chipotle Mexican Grill CMG.N and Mediterranean restaurant chain Cava Group CAVA.N, with shares falling ~40% and ~50% YTD, respectively

Still demand for value meals helped McDonald's MCD.N revive sales this year, sending its shares up 6%, while Domino's Pizza DPZ.O shares rose marginally

Value meals at Burger King and continued strength at Tim Hortons helped U.S.-listed shares of Restaurant Brands International QSR.N rise nearly 6% YTD

Yum Brands shares YUM.N rose 13.5%, marking its third year of rise, as Taco Bell strength helps offset weakness in its KFC and Pizza Hut chains in the U.S.

Yum also said it was mulling a sale of Pizza Hut

It was also a turnaround year for Wendy's WEN.O, Jack in the Box JACK.O and Shake Shack SHAK.N as they contended with a highly competitive restaurant industry

JACK and WEN on track to lose nearly half their value, while SHAK down nearly 37%

A year into its turnaround under Brian Niccol, Starbucks' SBUX.O shares down ~6% this year, with high coffee prices hurting margins, even as sales improved

SBUX and QSR both found local partners for their businesses in China this year to help revive sales in the market

A bifurcated consumer spending environment, high costs of commodities such as beef, and high discounting, were some trends expected to continue in 2026, according to RBC Capital Markets analyst Logan Reich

Investors are also closely watching the impact of weight loss drugs on consumer appetite for fast food and dining out