Gas prices weigh on U.S. restaurant sales growth

Summary

Restaurant chains said higher gas prices linked to the Iran war pressured consumers and slowed U.S. sales growth.

Why this matters

The story shows how rising fuel costs can affect consumer spending beyond energy, pressuring restaurant traffic, pricing, and investor expectations. It also offers an early signal of how households and companies are responding to the economic effects of the war.

Several U.S. restaurant chains, including Wingstop and Domino’s, reported weaker-than-expected sales growth in the latest quarter, saying higher gasoline prices tied to the U.S.-Israeli war on Iran led customers to cut other spending.

Analysts expect more chains to report slower growth in upcoming earnings, including Shake Shack and Jack in the Box, according to London Stock Exchange Group averages.

Wingstop said higher fuel costs contributed to an 8.7% drop in quarterly same-store sales.

Chipotle reported better-than-expected same-store sales growth of 0.5% but kept its outlook for flat annual growth. Chief Financial Officer Adam Rymer said uncertainty over the war and gasoline prices was one factor.

In April, nearly twice as many restaurant analysts cut profit forecasts for the next quarter as raised them, according to London Stock Exchange Group data.

Consumers had already been pulling back on restaurant spending before the latest rise in fuel costs, prompting more discounting. Yum Brands’ Taco Bell, which introduced a value meal starting at $3 in January, reported 8% U.S. same-store sales growth on Wednesday. McDonald’s, which last quarter posted stronger-than-expected sales as it pushed value meals, will report results May 7.

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