Why Shake Shack, Sweetgreen and Cava are flashing warning lights for the US economy
Fast casual restaurant chains report drop in earnings
- Underwhelming earnings from casual food businesses like Shake Shack, Sweetgreen, and Cava are signalling potential economic issues in the US.
- These businesses are predominantly located in US coastal metropolitan areas, making them particularly susceptible to the effects of President Donald Trump's aggressive policies on international trade and immigration.
- Coastal cities such as New York, Los Angeles, San Francisco, and Washington D.C. have experienced significant job losses and a projected decline in international tourism.
- This contrasts with other casual dining chains, like Olive Garden, which cater to a broader geographic spread across middle America and have not faced similar financial setbacks.
- The struggles of these coastal-focused businesses, alongside a University of Michigan study indicating reduced spending by left-leaning consumers, highlight regional economic disparities and serve as an early warning for the wider economy.