Goldman Sachs Analyst Says Consumer Spending to Stay Slow, May Hurt Restaurant Sales
A Goldman Sachs analyst says consumers will keep their spending in check during the second half of the year -- a trend that could keep restaurants' sales slow.
Analyst Steven T. Kron said in a note to investors Monday that "frugal spending habits" will continue into the last six months of 2007, particularly as home values keep declining and the fallout from the subprime mortgage market continues to worry consumers.
Kron said quick-service restaurants are more likely to be able to weather the environment well since they offer more value.
The analyst said McDonald's Corp. is his top pick, adding that the chain "is firing on all cylinders, as all geographies show strong top-line momentum."
Companies with an international presence and with some pricing power may also be able to handle the slow spending trend well.
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Source - AP
