Lower consumer confidence numbers create more bad news for restaurant companies.


WEN’s CFO Steve Hare started his presentation at an investor conference earlier this afternoon by saying that in light of the disappointing consumer confidence numbers released this morning that today marked the 24th consecutive time he has started off a presentation with bad news.  He went on to say that the “best” thing he can about the restaurant industry today is that things seem fairly stable.  That being said, he is not pleased with the consumer confidence numbers, which he recognizes as one of the key statistics to measure restaurant trends going forward, “so that’s a step back.”


Today's headline Conference Board consumer confidence index number declined to 48.5 from 53.2 last month.  The median estimate from Bloomberg was for a decline to 52.1.  This now puts the confidence index down 14% year-to-date.  The real story lies in the present situations Index which is only up 14% from the low set back in December 2009.  Confidence is critical for the U.S. economy and it is clear that the government stimulus has been lackluster, at best, in boosting the outlook of consumers in America.


In fact, there is considerable evidence to suggest that the spending could be worsening people’s confidence.  A pool released by Public Notice today suggests that 71% of people say government spending is too high and, more importantly, 68% say government spending is a factor in their own financial situation.  Consumption accounts for roughly 70% of GDP; restoring some semblance of confidence will be necessary to encourage real economic growth.


Mr. Hare also outlined the continued elevated level of unemployment, particularly among its key 18-24 year old demographic, and the rising cost of some key commodities, specifically beef and bacon, as risks to both WEN’s and the QSR industry’s top and bottom lines.


WEN – INDUSTRY OUTLOOK CONFIRMS LACK OF CONFIDENCE - conference board present situations


Howard Penney

Managing Director


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