Data from the Bureau of Labor Statistics today were positive, on the margin, for Quick Service restaurants.
Unemployment has been a thorn in the side of restaurant stocks but quick service restaurant chains have suffered more than most. This is, of course, due to their heavy reliance on the younger age cohorts who have been impacted severely from this recession from an employment standpoint. MCD, SONC, JACK, BKC, YUM, WEN and other quick service operators have mentioned high levels of unemployment (especially among young people) as being a primary impediment to same-store sales growth.
The most recent data from the BLS indicates that those falling into the 20-24 years age group have seen a year-over-year uptick in employment levels for the first time since September 2007 when the Employment Level, on a seasonally adjusted basis, for 20-24 year olds grew by 0.22%. MCD will still be making life hard for the other QSR chains, but this data point is a positive on the margin.
Howard Penney
Managing Director