Former CKE Restaurants CEO Andy Puzder says that brands that adjust to the new economy are going to be more successful. He says that Walmart and Target adjusted to the new economy and that’s why they are doing great. Similarly, the fast food chains that don’t adjust will not do as well as those that have like Chick-fil-A, In-N-Out Burger, and Shake Shack.
Fast Food Industry Needs to Adjust to the New Economy
I think there is a lot of competition now from grocery stores. Grocery store sales are up and people are eating at home. So that’s something that people that are running restaurants need to keep in mind. Secondly, people need to adjust to the new economy. It’s much like in retail. Sears is failing but Walmart is doing great. Kmart’s failing but Target’s doing great. That’s because Walmart and Target adjusted to the new economy.
It used to be if you ran a fast food restaurant you had an advantage with the drive-thru because a soccer mom coming home from a soccer game could pick up some food and drive home and it was very convenient. Now, maybe it’s not as convenient. You could call Uber Eats and you can choose from 40 different restaurants and it’s delivered to your door. You don’t even have to sign for it. Uber uses your credit card just like when you go with an Uber driver.
Brands That Adjust Are Going to be More Successful
The convenience element is changing. Brands that pick up on that are going to be more successful than brands that don’t. You see brands like Chick-fil-A doing very well, In-N-Out Burger, Shake Shack, these kinds of niche brands that aren’t these larger brands that have been associated with the traditional service. Millennials react differently to that. The world is changing and restaurants need to react just like other industries.
Markets Are Overreacting – Economy is Booming
Transportation and construction are particularly relevant because if the economy is growing that’s where you are going to see the jobs. You will see it in people building and you will see it in people delivering goods. We are seeing continued economic growth. I would also point out that consumer spending was the best since 2006 this last holiday season and consumer spending drives two-thirds of our GDP growth. The economy is doing very very well.
I don’t know why the markets are so overreacting to the negative news that comes out. The economy is booming, people are doing very well. Wages are up, more people are working, we have 7 million job openings, and people are taking home more of what they earn because of the tax cuts. There is really nothing on the horizon that would indicate that we are heading into a recession or even much of a slowdown.
A Good Economy is Not Good News to Certain Party
I think we are going to see continued accelerated growth this year despite what you are hearing in the news media. A lot of it is political. A lot of it is because there’s a Party out there for whom a good economy is not good news. That Party happens to control a lot of the news media so they’re having an impact. I think we are really having a dynamic economy and it can and will continue. The American people should be patient.