This post is part of the On the Margin blog.
One of the most frequently asked questions investors asked restaurant executives at the ICR Conference in Orlando this week has been the election question. Did sales and traffic improve after the election in November?
In general, the answer was no, if there was one. But Cheryl Bachelder, the CEO of Popeyes Louisiana Kitchen Inc., suggested on Wednesday that, indeed, consumers released their wallets once the election was over.
She noted that consumer confidence in November and December spiked, and that translated into sales. “We haven’t seen that kind of confidence in a long time,” Bachelder said.
“There are two levels of confidence,” she added. “There’s the ‘Oh my God that nasty election cycle is over.’ There was relief that no matter what you thought about the outcome, people would stop watching TV and go out and resume their normal lives.
“We saw that in our traffic and [same store sales]. People resumed eating out more often.”
Indeed, Popeyes this week reported 3 percent domestic same-store sales growth in the fourth quarter, much better than the 1.5 percent growth in the third quarter.
There was a school of thought in 2016 that the election was a major force impacting industry sales.
Americans on both sides of the aisle were consumed by the election. Ratings on the major news networks were up, and people were glued to their televisions, watching debates. They were also fearful of the outcome, regardless of whether they favored Hillary Clinton or Donald Trump.
Consumer confidence numbers certainly pointed to at least an emotional sense of relief at the end of the election season. In theory, that should have resulted in improved sales numbers.
But evidence is mixed, at best. Same-store sales rose 0.3 percent in November, according to the MillerPulse index, the best in seven months, but they fell 1.3 percent that month according to Black Box Intelligence. Many executives have dismissed suggestions that the election would help same-store sales.
Still, it’s conceivable to imagine some boost in sales at the end of the year, at the very least because it ends the uncertainty.
Jonathan Maze, Nation’s Restaurant News senior financial editor, does not directly own stock or interest in a restaurant company.
Contact Jonathan Maze at [email protected]
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