U.S. retail sales increased 0.4 percent in June compared to May and increased 3.4 percent compared to June 2018, according to the U.S. Census Bureau. Retail sales grew 2.9 percent in the first six months of 2019 vs. the same period last year.

Sales at foodservices and drinking places increased 0.9 percent in the June advance estimate over May and +4 percent from June 2018. Foodservice & Drinking Place Sales are up 4.2 percent in the first six months this year vs. the same time period of last year. But the advance sales of foodservices and drinking places of +1.3 percent for May over April was revised down to +1.0 percent.

In summary, June was a reasonably positive month unless there are major revisions next month.

There are a number of factors to consider when looking at the data. The advance sales numbers are based on a small sample and are subject to revision. A further limitations in the study is that it includes restaurants and bars only. Not surveyed are hotels, resorts, clubs, retailers, employee feeding, healthcare, education and military feeding.

Finally, the Census Bureau adjusts some but not all of the sales data for seasonal variations, holidays, and weekends but there is no adjustment for menu price changes.

Economic News This Week

Foodservice News This Week

  • Chipotle Mexican Grill seems to have bounced back after a whole string of food born illnesses were reported several years ago. Chipotle’s stock price almost hit $760 on July 15. The previous high was $758.61 in August 2015 just before customer food poisonings drove the stock down by two thirds. The chain has revised its menu, added ordering kiosks, invested in delivery service and revamped its loyalty program.
  • Raising Cane’s introduces a new restaurant design featuring glass panels in the kitchen so customers can see the preparation of the sauce and staff hand-squeezing lemons for the chain’s lemonade. The new design also has a patio. The chain plans to implement this design when building new restaurants.
  • Dunkin’ says some of its franchisees “demonstrated pervasive non-compliance” with federal law requiring verification of employees legal status to work in the U.S. Court records show Dunkin’ has sued at least 30 franchisees since 2018. In at least one case franchise owners filed a counter claim stating that Dunkin’ attempted to terminate franchisees without compensation or giving the franchisees a chance to rectify the problem.
  • Starbucks will significantly reduce the number of food items the coffee chain offers. The Seattle-based coffee giant will also stop selling newspapers. The goal is to reduce clutter in Starbucks locations by getting rid of items its customers aren’t buying anyway. In the past Starbucks stopped selling CDs and cut back on merchandise like coffee mugs.
  • Plant-based burger sales continue to flourish. The NPD Group reports a 10 percent increase in plant-based burger sales in the past year and 95 percent of beef burger buying consumers have at least tried a plant-based burger once in the past year. While vegetarians and vegans contribute to the plant-based product’s increased sales volume, they represent a small percentage of the U.S. population and are not the primary drivers of growth in this area, according to NPD. Will plant-based burgers catch beef burgers in popularity? NPD says there are 228 million servings of plant-based burgers at QSRs in the year ending in May but there were 6.4 billion beef burgers served in the same time period.
  • Corporate Stirrings: Slim Chickens will use an investment from 10 Point Capital to expand the chain’s unit count. Vintage Capital has offered to buy the struggling Red Robin Gourmet Hamburger chain for an all-cash deal worth $461.4. Vintage Capital owns 12 percent of Red Robbin’s stock. A report says that Red Robin’s board did not find the offer to be hostile and is seriously considering it.
  • Growth Chains: Refuel Travel Stops is planning on opening 10 operations in Charlestown and eastern South Carolina. Slim Chickens will open 60 restaurants this year with a goal of having 600 stores in 10 years.
  • Comparable Store Sales Reports: Domino’s Pizza (U.S. system up,3.0 percent, company owned up 2.1 percent and franchised up 3.1 percent.)

 

For details and same-store sales of other chains, click here for the latest Green Sheet.