Why McDonald’s Success Sets Off Economic Alarm Bells

Restaurants are pivoting to drive-thrus—but it’s a foreboding economic indicator

Rob Walker


Photo: Jeff Greenberg/Getty Images

If you’re looking to find somebody who is optimistic about the future, you might want to ask a McDonald’s franchisee. According to the latest survey of that group by Kalinowski Equity Research, they’re more upbeat than they have been in over a decade. The caveat is that they’re optimistic about the future of McDonald’s.

And Mickey D’s, which saw Q3 U.S. sales rise 5% and shares rise over 16% for the year, isn’t alone. Domino’s, Papa John’s, and Wingstop all recently announced same-store sales up by double digits in the third quarter of 2020, the Wall Street Journal reports, even as independent restaurants have gotten creamed.

This is quite a reversal. As recently as a year ago, it was the fast-food chains that still seemed to be scrambling, trying to keep up with the bougier “fast-casual” boom (the decade’s “most important food trend”). Led by the likes of Chipotle and Shake Shack, these chains leveraged healthier options, superior ingredients, and quasi-cosmopolitan flair to woo consumers who would pay a little bit more to feel a little less guilty. In part, fast-casual was a corrective to decades of fast-food dominance — and an informal indicator of good economic times.