This Week In Foodservice

The editorial team aggregates key industry information and provides brief analysis to help foodservice professionals navigate the data.

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The National Restaurant Performance Index Increased, The Drucker Institute Lists top 250 Best-Managed Companies, A&W Opens new Training Center

The National Restaurant Association’s Restaurant Performance Index hit 101.1 in October, an increase of 0.7 percent. A 1.5 percent increase in the Current Situation Index fueled the growth. Increases in both same store sales and customer traffic contributed to the Current Situation Index hitting 101.1. Any reading greater than 100 indicates expansion while a number less than 100 indicates contraction.

The Expectations Index totaled 101.2 for October, down just 0.1 percent from the previous month. As for operators’ approach to investing in their businesses, the picture is somewhat mixed. The percentage of operators reporting they made a capital expenditure for equipment, expansion and/or remodeling in the last 3 months hit 52 percent, down from 9 percent from September. Looking ahead, 61 percent of operators intend to make a capital expenditure for equipment, expansion or remodeling in the coming months. This represents a 2 percent decline from September.

While the Restaurant Performance Index tends to be up one month and down the next, overall the index has remained in growth territory.

Economic News This Week

  • Real Gross Domestic Product for the third quarter was revised upward to 2.1 percent by the Bureau of Economic Analysis’ second estimate. The Bureau’s first third quarter estimate was 1.9 percent.
  • Initial jobless claims totaled 215,000, a decline of 15,000 for the week ending November 23. The 4-week moving average declined by 1,500, which meant claims totaled 219,750. Despite a comment last week that unemployment claims were rising this week’s report seems to indicate a historically low number of claims.
  • Despite increasing 3.1 points and hitting a 2-month high of 46.3, the November Chicago Business Barometer remained in contraction mode. (Any reading less than 50 indicates contraction.) The Production Index slipped to 42.3. The New Orders Index rose 12.5 points to a final level of 49.4. Order Backlogs climbed back to 45 after falling to 33.1 in October.
  • New orders for manufactured durable goods increased 0.6 percent in October. Orders for manufactured durable goods have increased four of the last five months. Shipments of manufactured durable goods changed little from September.
  • Real disposable income decreased 0.3 percent in October, the Bureau of Economic Analysis reported. Personal consumption expenditures increased 0.1 percent.
  • New single family home sales fell 0.7 percent in October from September to an adjusted annual rate of 733,000. Estimated sales were up 31.6 percent compared to October 2018.
  • The Conference Board’s Consumer Confidence Index declined “slightly” in November. The index came in at 125.5 in November, down from 126.1 in October. The Present Situation Index fell to 125.5 from 173.5 in October. The Expectations Index rose to 97.9 in November from 94.5 in October. A spokesperson for the Conference Board said growth in the last quarter of 2019 will be weak but the Consumer Confidence Index is still high from a historical point of view.

Foodservice News This Week

  • The Drucker Institute is out with its list of the 250 Best Managed Companies. The list ranks companies on customer satisfaction, employee engagement and development, innovation, social responsibility and financial strength. Companies can earn as many as five stars in each of these areas. Companies that earn just one or two stars in a category receive a “red flag.” This year the top scoring company was Amazon with a score of 120.2. A trio of restaurant companies made the list. YUM Brands came in at no. 142 with a score of 57.8. Darden ranked no. 172 with a score 56.0 and McDonald’s was no. 189 with a score of 55.5. McD’s earned red flags for customer satisfaction and for employee engagement and development. Three suppliers well known to the foodservice industry made the list: Illinois Tool Works (no. 120), Ecolab (no. 150) and Sysco Corporation (no. 199.)
  • A&W opened a national learning center and prototype restaurant called A&W University. The new training center is located less than a half hour from A&W’s Kentucky headquarters. The restaurant features a new design designated as “Gen19” that has a familiar yet new aesthetic.
  • A suit by the California Forestry Department claims In-N-Out Burger caused a wild fire in 2017. The suit claims a tractor mowing grass started a fire on In-N-Out property.
  • Growth Chains: Jeni’s Splendid Ice Creams, the super-premium ice cream chain headquartered in Columbus, Ohio, plans to open stores in Atlanta, Austin, the Carolina’s and Nashville as well as other areas. A&W has added more than 70 new locations since YUM! Brands sold the chain to its franchisees in 2011. A&W currently has a dozen more units in various stages of development. Walk-on’s Bistreaux & Bar plans on open six locations in the next five years.
  • Comparable Store Sales Reports: Cracker Barrel up 3.8 percent and Rave Restaurant Group (Pie 5 Pizza down 12.2 percent and Pizza Inn up 3.1 percent.)

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

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