For the first time in its 52 years of operation, Subway announced that it contracted in 2016, shuttering 359 US locations which as Bloomberg described was the "biggest retrenchment in the history of the restaurant chain" whose total store count dropped 1.3% from 27,103 in 2015 to 26,744 even as it remained the most ubiquitous fast-food eatery in the US, although McDonalds still tops if by sales.
Over the past several months, we've highlighted a number of economic studies analyzing the potential negative impact, in terms of job losses, that may be expected to result from the state-mandated minimum wage hikes that are currently being implemented around the country...that said, here are a couple of examples of why the issue may be much larger than anyone expects.
In an attempt to recover its eroding client base, McDonald's will soon provide an in-home delivery service. The company, which has been offering delivery for many years in Asia, is now testing delivery in the U.S. and Europe and more Asian markets. In Florida, it has partnered with ride-sharing service Uber to deliver food.
If there is any economic assumption that goes unquestioned, it's the notion that profits will remain robust for the foreseeable future. This assumption ignores the tidal forces that are now flowing against profits.
Starting tomorrow, Uber drivers around the country will join protests organized by the union-backed "Fight For $15" organization. But, with autonomous vehicles just around the corner, drivers should be careful what they wish for...