When the phrase “consumer confidence” is thrown around, it’s usually in relation to how convincing a brand has been at telling shoppers they’re the one to buy. However, fast-casual restaurants are finding out that, when things get ugly in both the political sphere and that of everyday life, the confidence consumers have can be an entirely different beast.
To answer why his company failed to hit its Q3 estimates, Starbucks Chairman and CEO Howard Schultz pointed the finger at the unpredictable presidential election, recent boil-over moments in racial tensions and heightened perceptions of terrorist activity as primary drains of the confidence consumers have in the retail experience, via Financial Times. Schultz went so far as to claim that never before have retailers had to deal with this level of depressed consumer activity and that his company’s performance should not be judged too harshly because of it.
“No one should misinterpret or in any way look at the challenges that we and many, many other companies are facing as something that has been done before,” Schultz said. “This is quite unusual. It’s unsettling.”
It’s one thing to claim that foreign unrest depresses travel to said countries, but it’s another to see the effect of an uncertain future on a previously active consumer demographic. Chris O’Cull, director of equity research at KeyBanc Capital Markets, put it bluntly that there just doesn’t seem to be time between all the must-see chaos on TV lately to go out to eat anymore.
“Several disruptions, i.e., watching primary debates, watching news coverage of recent events, political conventions, presidential debates, etc. have resulted, or may result in, more people staying home and ordering pizza,” Cull told FT.
At least there’s some people out there willing to give pizza a chance.