Sometimes, quarterly results from big public companies contain clues about how consumers are holding up. Take Yum! Brands: The restaurant conglomerate was buoyed by international growth in the second quarter, but U.S. same-store sales were down at Pizza Hut and KFC. Growth slowed at Taco Bell, Yum’s most resilient chain. It’s a similar story elsewhere in the quick-service restaurant sector. 

Americans do a whole lot of eating out and ordering in. So, a slowdown in spending on those categories can be an early sign we’re pinching pennies. 

“When consumers get nervous, eating out in restaurants is one of those things that disappears pretty quickly,” said Alex Susskind, a professor of the food industry at Cornell University. 

Struggles at fast food chains can signal that middle and lower-income consumers in particular are feeling squeezed. 

Just a few years ago, COVID-19 stimulus and fast wage growth helped those same income groups roll with fast food price hikes. 

“There was a discussion in the industry of like, OK, when is it going to be the time where consumers have had enough,” said Ben Coley, editor of the trade magazine QSR.

People started to lose their appetites over those prices about a year and a half ago. 

“And that’s when you saw the influx of all these value messages,” Coley said.

McDonalds’ five-dollar meal deal and Taco Bell’s super-cheap cravings menu are the bids to win back consumers who are having more meals at home.

“What they’re looking for is limited time offers, coupons, meal deals, ways to optimize what they’re getting,” said Lynn Dornblaser, director of innovation and insight at Mintel.

Even the relative resilience of Yum! Brands’ crown jewel, the Taco Bell brand, tells a story of a consumer searching for value. 

“The build, if you will, for a Mexican menu item tends to be a little less protein than, for example, a burger,” said Sara Senatore with Bank of America. So it’s a lot easier to keep a lid on crunchwrap and cheesy bean burrito prices. 

Senatore said fast-food’s race to the bottom when it comes to menu pricing “could be a canary singing very quietly right now,” Senatore said.

And warning us that consumers making the least money could be facing extra financial pressure.