UBS Channel Survey: McDonald's and Wingstop Franchisees Report Continued Consumer Spending Pressure
N.R. Finch
UBS franchisee channel checks show macro headwinds and elevated gas prices are dragging U.S. restaurant traffic and sales, hitting low-income diners hardest; the analyst has turned more cautious on the second half.
What are franchisees actually saying?
Wingstop franchisees report negative same-store sales and traffic, citing five overlapping pressures: macro stress on their core customer, tough year-over-year comparisons, consumer fatigue as quick-service rivals all pivot to chicken, self-cannibalization in high-penetration markets (especially delivery), and fading social-media buzz.
McDonald's franchisees describe Q2-to-date performance as "mixed" — a tough April compare plus rising gas prices are squeezing low-income consumers in particular.
This means → two different formats (wings vs. burgers) are sending the same signal: the problem sits on the demand side, not at the brand level.
Why is the analyst turning more cautious on H2?
UBS analyst Dennis Geiger says he is "more cautious" on U.S. restaurants heading into H2 2026.
He cites three reasons: near-term headwinds are not fading, tax-refund tailwinds are wearing off, and the risk of persistently high gas prices remains.
In plain terms = in the first half, consumers still had refund checks to lean on. In the second half that cash is spent, gas hasn't come down, and dining-out budgets get squeezed further.
What is happening to the gap between restaurant and grocery prices?
In May, U.S. food-away-from-home inflation ran at 3.5%, while food-at-home came in at 2.7% — a gap of roughly 80 basis points, up from about 60 bps in April.
This means → when consumers weigh eating out against cooking at home, the value case for staying home is widening, and the marginal appeal of dining out is slipping.
UBS expects restaurant-price inflation to ease modestly over the coming quarters as elevated pricing rolls off the base — but in the near term the scissors gap remains a structural headwind for the industry.
Where are franchisees pinning their hopes?
Wingstop franchisees expect the FIFA World Cup (June–July) to deliver a short-term traffic lift and remain cautiously optimistic about trend improvement later this year or in early 2027.
McDonald's franchisees point to a more detailed catalyst list: specialty beverages (dirty sodas, refreshers) lifting check size, an energy drink launch in August plus menu innovation (chicken sandwiches, snack wraps), World Cup meal deals and a Q4 *Home Alone* tie-in, and value platforms like the "under $3 menu" and "$4 breakfast combo."
This reflects a two-track playbook: event-driven marketing (World Cup, IP tie-ins) to pull near-term traffic, and low-price menus to hold the most price-sensitive customers. Whether it works hinges on whether gas prices and the macro backdrop offer any relief in H2.
Content is for reference only, not financial advice.