The restaurant industry did not have an easy 2016. Between uncertainty about the presidential election that pervaded consumer sentiment, lower food costs at grocery stores and diners’ rekindled desire to eat at home, same-store sales across the sector decelerated and declined throughout the year. Wage inflation added pressure to this already-difficult environment, cutting into restaurant bottom lines. By the summer of 2016, some Wall Street analysts were warning of an impending restaurant recession.
These macroeconomic challenges are reflected in the 2017 FORBES Global 2000: some of the biggest restaurant names on the list — including McDonald’s MCD -0.04% and Yum! Brands — find themselves sitting at lower rankings than they did just one year ago.
McDonald’s is the top-ranked restaurant company on the Global 2000; it came in at #215 on the overall list, down from #189 in 2016 and sitting lower than the likes of Aflac AFL -0.14%, Lowe’s LOW -0.34% and Christian Dior . The burger giant has seen heightened competition from the fast-casual sector (i.e, chains like Shake Shack, Chipotle, Panera Bread), but its all-day breakfast gambit has been a boon to earnings, and Wall Street analysts seem to think that the company has even sunnier days ahead.
“McDonald’s scores have begun to significantly improve—in many cases more than peers,” RBC analyst David Palmer wrote in a recent research note. “While McDonald’s affordability and convenience scores are at-or-below average, we believe these are poised to rise significantly over the next year.”
The World’s Biggest Restaurants In 2017
Coming in second place in the restaurant sector and #370 in the overall Global 2000 is Starbucks SBUX +1.04%. The coffee behemoth has been a pretty steady fixture in national headlines over the last six months: in December, founder and then-CEO Howard Schultz announced that he would step down from the chief executive spot and hand the reins to Kevin Johnson in April; in January, the company hit back at President Trump’s executive order banning immigrants and refugees from seven Muslim-majority countries by announcing that it will hire 10,000 refugees over the next five years; and in April, the coffee behemoth jumped on the Instagram-foods trend by releasing its own camera-ready “dish”: the multi-colored and sugar laden Unicorn Frappuccino.
