Multiple American “fast casual” restaurants have recently declared bankruptcy, and many others posted flagging quarterly sales numbers for the first three months of 2025. One expert says this could be a sign that the U.S. economy is in for a turbulent future.
During a Friday segment on CNN, host Erica Hill pointed out that fast food chain McDonalds posted its worst quarterly sales numbers since the onset of the Covid-19 pandemic, as low-income customers are now spending less at restaurants by double-digit percentages. And she reminded viewers that chains like Red Lobster, Buca di Beppo, Hooters and T.G.I. Friday’s have declared for bankruptcy. Other restaurants like Applebee’s, Outback Steakhouse and Cracker Barrel have also reported significant drops in sales.
Richard Quest — the network’s at-large business editor – said that these lagging sales numbers at restaurants are a reflection of the United States’ consumer-driven economy about to go through a painful period.
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“[The economy] is weakening. That’s the blunt, honest assessment that those parts of the economy where those of lower incomes would spend and those who are more watching their pocketbook — we all watch our pocketbooks at certain to a certain extent — but those areas which are constrained, like those restaurants, people are going less.”
Hill acknowledged in the segment that more Americans are now using “buy now, pay later” loans for basic necessities like groceries and food delivery. And a portion of those Americans are making their loan payments late. Quest said that was yet another sign of a potential recession down the road, comparing it to the subprime mortgage crisis that precipitated the 2008 financial crisis and resulting Great Recession.
“You’ll start to see it in cinemas and movies. You’ll start to even see certain snacks. And that then moves into the pay loans or the payday loan companies because they are paying out to people who can’t get regular credit,” Quest said. “It’s it’s not quite subprime mortgage, but when those who can’t access money through normal credit cards or loans or bank loans, when those people start going to [buy now, pay later] type of arrangements, these are the canaries in the mine that will eventually will eventually show, because at the moment we do not have the data from the first three months.”
Watch the full segment below, or by clicking this link.
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