McDonald’s CEO Thompson: ‘We’ve Seen the Starts and Stops of a Recovery’ in US

Monday, 29 Apr 2013 08:48 AM

By Dan Weil

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The U.S. economy is going through a bumpy rebound, making things difficult for retailers, says McDonald’s CEO Don Thompson.

“I think what we’re seeing relative to the U.S. is that we’ve seen the starts and stops of a recovery,” he told CNBC.

The Commerce Department Friday reported that gross domestic product (GDP) grew 2.5 percent in the first quarter, buttressed by consumer spending.

Editor's Note: The ‘Unthinkable’ Could Happen — Wall Street Journal. Prepare for Meltdown

“But you have to take it with a grain of salt,” Thompson said.

“As long as unemployment is at a high rate and with skittish consumer confidence, this will remain a challenging retail environment. … We always plan for the environment we’re in. Right now, we don’t expect to get the benefit of a resurgent economy.”

Unemployment stood at 7.6 percent in March, and non-farm payrolls grew 88,000 for the month.

While it “remains to be seen” whether hiring is truly in an uptrend, McDonald’s has increased its hiring for late night and breakfast shifts, Thompson noted.

To be sure, some countries are strong for McDonald’s, such as the United Kingdom and Russia, he explained. “But across Europe you have a pretty mixed bag. We think Europe is going to be a much longer recovery”

Economists have mixed views about the first-quarter U.S. GDP data.

“We saw some good resilience from the consumer, particularly given all the headwinds,” Michael Feroli, chief U.S. economist at JPMorgan Chase, told Bloomberg.

“The weakness in government spending is an issue. It’s going to be tough to repeat the first-quarter performance this quarter.”

Editor's Note: The ‘Unthinkable’ Could Happen — Wall Street Journal. Prepare for Meltdown

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