Hasta La Creative!

One analyst last week proclaimed the start of a “restaurant recession” amid weaker same-store sales growth for McDonald’s as he downgraded 11 big chains. Talk of a “maturing economic cycle” also came from Ford as it announced disappointing profits and lower sales forecasts.

But many aren’t buying the recession talk, notably the Federal Reserve and the retail industry. “Near-term risks to the economic outlook have diminished,” the Fed said in a statement July 27. Though the Fed remains wary of low inflation and the global economic outlook, stocks have rebounded since the U.K.’s vote to leave the European Union last month. Odds now look higher the Fed will actually raise interest rates to restrain the economy as soon as September.

The National Retail Federation last week actually increased its forecast for 2016 sales growth to 3.4% from 3.1%, based on improving economic indicators. Rather than a canary in the coal mine, McDonald’s and other restaurant chains may be confronting a different animal, what Dave Schick, retail analyst and research director for Consumer Edge Research, calls “the mouse that roared.”

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