McDonald’s (MCD), Yum Brands (YUM) and Coca-Cola (KO) can’t catch a break in 2014. Indeed, all three stocks have tumbled into negative territory for the year-to-date, trailing a roughly 8% gain for the S&P 500.
In more bad news, the latest news from the sector indicates more pain ahead for MCD, YUM and KO stock.
From weak U.S. sales to a food scandal in China, it seems like everything is conspiring against these food and beverage stocks this year. And in many ways, there’s little they can do about it. As we’ve noted, the same economic forces weighing on Wal-Mart (WMT) are also hurting fast-food and beverage stock – at least those that count on lower-income customers for the bulk of sales.
Indeed, in many ways the recession never really ended for lower-income consumers. Unemployment is down, but much of the decline has been attributable to folks finding work with low wages and few — if any — benefits. Rising gas prices, mandatory health insurance and higher food prices are just some of the forces chipping in to make consumers reluctant to spend their discretionary dollars.
There are plenty of headwinds for MCD, KO and YUM stock — especially when you throw in unfavorable currency exchange, rising competition and the appeal of healthier alternatives to hamburgers, tacos and sugary drinks. Here’s a look at some of the major issues weighing on their shares: