Restaurant Sales on the Rise, McDonald’s Tests New Burger Patties and Much More

Restaurant sales picked up in April after faltering in March. Will McDonald’s need to buy a bunch of refrigerators in the future? Foodservice operators keep hiring at a rapid pace. All this plus more than two dozen comparable store sales reports and a lot more This Week In Foodservice.

U.S. retail sales rose 1.3 percent in April over March and were up 3.0 percent from April 2015. Not counting automobile sales and auto part sales, total retail sales were up 0.8 percent. In the first 4 months of this year, sales were up 3.5 percent.

After slipping in March, restaurant and drinking place sales rose 0.3 percent in April from March and sales increased 5.2 percent over April 2015. So far this year restaurant and bar sales are up 7.4 percent.

It is necessary to point out that there are some limitations and caveats to the Commerce Department survey. The data above is considered “advance” findings in that it is based on a limited preliminary number of respondents. When a larger sample is examined the sales numbers are subject to revision and in practice, are frequently revised.

Some of the statistics are adjusted for seasonal and calendar variations but none are adjusted for menu price changes.

Economic News This Week

Foodservice News This Week

  • McDonald’s tests fresh hamburger patties. Fourteen restaurants in the Dallas area are testing this. A switch to fresh hamburger from the current frozen patties would be a massive undertaking for both McDonald’s and its suppliers. Every McDonald’s unit would have to replace its freezers with refrigerators.
  • Foodservice employment increased by 18,200 in April according to the Bureau of Labor Statistics data. With total private employment rising by 117,000 for the month, foodservice accounted for a little over 10 percent of U.S. job growth.
  • Menu labeling requirements are closer to implementation. The U.S. Food & Drug Administration announced enforcement of menu labeling rules will begin one year after the guidance document is published in the Federal Register. It has been six years since the menu labeling provision was included in the Affordable Care Act.
  • To offset wage inflation, Wendy’s will add self-service kiosks. Higher wages force employers to use technology to replace workers. The quick-serve chain also expects to sell 315 company owned restaurants to franchisees this year. So far Wendy’s has sold 55 units and has another 150 in the process of being sold. Wendy’s has less than 400 franchisees, down from more than 450 franchisees 3 years ago.
  • Travel Centers of America invested $750 million in its Minit Mart C-store brand. The company now has 228 stores in 11 states. The Minit Mart chain now has 7 Godfather’s Pizza, 2 Charley’s Philly Steaks, 2 Burger Kings, a Dairy King, a Popeye’s, and a Dunkin’ Donuts operating in their stores.
  • Chipotle Mexican Grill feels the Centers for Disease Control mishandled the chain’s E. coli outbreak last year by issuing updates that were inaccurate, confusing and “unnecessarily intensified the public’s concern.” The CDC dismissed Chipotle’s complaints stating that the agency acted to protect and inform the public. http://www.denverpost.com/business/ci_29860335/cdc-rejects-chipotles-contention-that-it-botched-e
  • American-themed concepts keep coming on strong in The United Kingdom. Scott Hume, publisher of BurgerBusiness, reports barbecue, burger bars, and diners may overtake Mexican concepts as the major growth channel. One of the fastest growth operations is Dunkin’ Donuts.
  • Captain D’s has remodeled 47 percent of its more than 500 Restaurants and expects to reimage another 50 this year.
  • Middleby Corporation reported its sales of commercial foodservice equipment grew by 6.4 percent to $279 million in the company’s quarter ending April 3.
  • Growth Chains: Highway 55 has signed master franchise agreements with 2 existing franchisees for 300 restaurants in the next 5 years. Chick-fil-A will add 12 more locations in NY City over the next 5 years. Malawi’s Pizza will open 4 restaurants in Houston by the end of 2017 with a goal of 20 operations in the area. Qdoba plans on opening 50 to 60 restaurants this year. Dunkin’ Donuts will open 15 restaurants on the 4 major Hawaiian Islands starting with one in 2017. Pizza Press has signed new franchise agreements to open 12 locations by the end of this year and 30 locations by the end of 2017. Hooters has signed a development agreement for 10 restaurants in the Sacramento CA area in the next 6 years. Checker’s will open 3 drive-ins in the Orlando area. Krispy Kreme will open 20 locations in Bangladesh in the next 5 years.
  • Comparable Store Sales Reports: Applebee’s down 3.7 percent, Arcos Dorados up 15.9 percent, Ark Restaurants up 1.0 percent, Bojangles up 2.0 percent, Bravo Brio Restaurant Group (systemwide down 2.8 percent, Bravo restaurants down 4.1 percent and Brio restaurants down 2.1 percent), Carrols Restaurant Group up 5.7 percent, Chuy’s up 3.2 percent, Del Taco up 3.2 percent, Denny’s (systemwide up 2.5 percent, company-owned restaurants up 3.5 percent and franchised restaurants up 2.3 percent, El Pollo Loco (systemwide up 0.7 percent, company-owned restaurants down 0.6 percent and franchised restaurants up 1.8 percent), Fiesta Restaurant Group (Pollo Tropical flat and Taco Cabana up 17 percent), Fogo De Chao up 1.1 percent, Good Times Burgers up 0.5 percent, Habit Burger up 2.2 percent, Ignite Restaurant Group (Joe’s Crab Shack down 1.3 percent and Brick House Tavern down 4.5 percent), IHOP up 1.5 percent, Jack in the Box (systemwide sales were flat, company-owned restaurants were up 1.0 percent and franchised restaurants were up 0.3 percent), Jamba, Inc. (systemwide sales were down 2.1 percent, company-owned restaurants were up 0.2 percent and franchised locations were down 2.4 percent), Noodles & Company (systemwide locations were down 0.1 percent, company-owned locations were flat and franchised locations declined down 0.5 percent, NPC International (Pizza Hut up 4.1 percent & Wendy’s up 2.4 percent), Papa John’s (North America up 0.1 percent, Company Owned up 1.0 percent & Franchised down  0.2 percent), Potbelly Sandwich up 3.7 percent, Qdoba (System up 2.1 percent, Company owned up 3.1 percent, & Franchised up 1.2 percent), Rave Restaurant Group (Pie Five Pizza down 4.0 percent & Pizza Inn down 2.2 percent), Shake Shack up 9.9 percent, Wendy’s (North America up 3.6 percent, Company owned up 4.8 percent & Franchised up 3.5 percent), Wingstop up 4.6 percent, and YUM! (KFC up 1.0 percent, Pizza Hut up 3.0 percent & Taco Bell up 1.0 percent.)

For details and same-store sales of other chains, Please Click Here for the Green Sheet.

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