400 Basis Points Drop: Wildfires and Weather Impact Restaurant Sales

Restaurant chains like Chipotle, Wendy’s, and McDonald’s faced a challenging start to 2025. January sales were hit by freezing temperatures and wildfires, with Chipotle estimating a 4% drop in same-store traffic due to the Los Angeles wildfires. Overall, Chipotle’s traffic fell 2% compared to the previous year. Despite these setbacks, executives from various chains are optimistic about a recovery later in the year. Fast-food net sales rose by 3.4% in January, though this was a slight decrease from December’s 4.9% growth. McDonald’s, recovering from an E. coli outbreak, expects sales to rebound by the second quarter. Starbucks, however, anticipates a longer recovery period after four consecutive quarters of declining same-store sales. Consumer sentiment is low, with fears of rising prices, but restaurants are not currently factoring in significant impacts from trade wars or tariffs in their forecasts.

Source: www.cnbc.com