A ‘restaurant recession’ sounds scary. Are we really on the brink of one?



A 'restaurant recession' sounds scary. Are we really on the brink of one?

In the past several weeks, the picture that we’ve gotten of the restaurant industry hasn’t exactly been a promising one. Dunkin’ Donuts saw traffic slip at its U.S. locations in the latest quarter. Potbelly Sandwich Works said it expects to be challenged by a “more cautious consumer” in the near future. And McDonald’s said its sales were hampered by a broad-based retreat from dining out.

Talk of a “restaurant recession” has been percolating on the Internet after an investment bank analyst used the provocative phrase in a research note to describe where the dining industry — and the overall economy — might be headed. So what’s going on here? Here, we break down a few popular theories.

Theory 1: This is an early, foreboding sign that consumers are starting pull back on their spending. This is the most frightening of the possibilities, because if it’s right, it suggests the broader economy could be poised for slowdown. But it’s also the explanation that seems toughest to prove.

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