Both McDonald’s and Starbucks hosted earnings calls as well this week and neither event was particularly pretty. In Q2, McDonald’s posted its lowest overall profit in 14 years, and US same-store stores declined 8.7% for the quarter as a whole. Preliminary July same-store sales trends were just barely in positive territory with breakfast daypart sales extremely weak and customer transactions significantly negative despite the average ticket being much higher. Drive-thru accounted for 90% of sales as only 2000 units currently have open dining rooms. McDonald’s has pumped $100 million into supplemental US marketing support and is encouraging weaker franchisee units to close. They’ve announced to date that 200 US units will close and another 100 in Walmart locations. Corporate has put a hold on virtually all new menu initiatives and seemed contented with faster drive-thru times (20 seconds) as the major accomplishment to date. The US Starbucks situation was absolutely dire. In its Q3, Starbucks lost money as a company, with US stores losing 52% of transactions and 40% of sales versus the prior year. While the trend-line of sales improved month over month, the overall loss of business was so steep that US company stores posted a 9% loss at the store level for the first time since the mid-1990s when electronic SEC records became available for verification. The same daypart pattern as with McDonald’s was true: breakfast was extremely weak, particularly in urban centers, while 11 AM – 2 pm experienced a plus-up in traffic. The average ticket was very strong. By July, Starbucks implied its same-store sales were down 16% and that store level profitability had returned. Although they did not mention specifics, Starbucks management noted that they expected better conditions to prevail in 2021.