Many QSR chains starting to show signs of weakness

As the unemployment rate in the United States continues to rise, hitting 8.9 percent in April, quick-service chains that have so far battled successfully against the recession may find their good fortunes are running out.

Analysts last week proffered that a combination of still-rising unemployment and a decrease in the number of consumers left to trade down from higher-priced restaurants and provide QSRs with incremental sales gains could lead to softness in the months ahead.

With the exception of McDonald’s, which on Friday posted a 6.1-percent increase in U.S. same-store sales for April, chains including Burger King, Wendy’s, Carl’s Jr. and Sonic have all reported slowed sales. Same-store sales for those chains were either modestly positive or dipped into negative territory.

“We attribute this sequential softening of QSR sales to rising unemployment and to a moderation in consumer trade-down, assuming that consumers inclined to trade down to QSR have probably already done so,” analyst Joe Buckley at Bank of America-Merrill Lynch said in a Friday research report.