Total U.S. retail sales increased 0.3 percent in October from September and increased 3.1 percent from October 2018, per data from the U.S. Census Bureau. The advance sales number for September was unchanged at minus 0.3 percent from the preliminary estimate. In the first 10 months of this year, total retail sales are up 3.4 percent from the same time period last year.

The advance estimate for foodservices and drinking places sales in October dipped 0.3 percent from September but grew by 4.7 percent from October 2018. In the first 10 months of this year foodservice and drinking place sales increased 4.3 percent from the first 10 months of 2018.

While failure to increase restaurant sales on month over month basis is a bit discouraging, the long-term sales picture is quite positive.

This data comes with some cautions and limitations. The Census Bureau bases its advance report on a limited sample and it may revise the study with the receipt of a broader sample. Second, the survey covers only restaurants and bars. Not included are hotels, resorts, clubs, employee feeding, schools, colleges, healthcare and military. Finally, some but not all of the statistics are adjusted for seasonal variations, holidays and weekends but not for menu price changes

Economic News This Week

  • Initial-jobless claims totaled 225,000, an increase of 14,000 from the week ending November 9. The 4-week moving average totaled 117,000, a bump of 1,750 claims.
  • The Producer Price Index for Final Demand increased 0.4 percent in October on a seasonally adjusted basis, per the Bureau of Labor Statistics. In the last 12 months ending in October the Producer Price Index is up 1.1 percent.
  • The Consumer Price Index increased 0.4 percent in October, according to the U.S. Bureau of Labor Statistics. In the last 12 months ending in October, the index is up 1.8 percent. Excluding food and energy, the index was up 0.2 percent in October and up 2.3 percent for the 12 months ending in October.
  • Industrial production fell 0.8 percent in October, per the Federal Reserve. Much of the decline was attributed to a drop of 7.1 percent in the output of motor vehicles that was due, in part, to a strike at General Motors. Excluding motor vehicles and parts, the index for total industrial production moved down 0.5 percent. The index for manufacturing was down 0.1 percent. Mining production decreased 0.7 percent while utilities output fell 2.6 percent. Capacity utilization for the industrial sector totaled 76.7, a 0.8 decline.
  • The Empire State Manufacturing Survey results were “sluggish” in November and changed little from October, per the New York Federal Reserve. General business conditions hit 2.9, a decline of 1.1 points. (Any reading greater than zero indicates growth.) New orders rose 2 points from October for a final November reading of 5.5. Shipments fell 4.2 points for a final reading of 8.8 in November. Despite a 4.3-point increase, unfilled orders remained in contraction territory at minus 8.2. The Number of Employees index increased 2.8 points to a final level of 10.4, marking the third consecutive month where hiring increased.

Foodservice News This Week

  • Food prices increased 0.2 percent in October, according to the Consumer Price Index. For the 12-month period ending in October, food prices increased 2.1 percent. Food-at-home prices increased 0.3 percent in October while food away from home prices rose 0.2 percent. This is one of the few times recently that food at home prices rose faster than food away from home prices. In the last 12 months ending in October, food-at-home prices rose 1.0 percent while prices for food away from home are up 3.3 percent.
  • Subway tries to stop closing stores. In 2015 Subway had more than 27,000 stores. In 2018 the number of units the sandwich chain operates dropped to less than 25,000 for the first time since 2011. The chain is trying a variety of tactics, including trying to find another franchisee to run a restaurant that a current operator wishes to close.
  • Shake Shack will temporarily close some locations in 2020 to upgrade them. The changes will improve layouts to ensure optimal order flow from multiple ordering channels and adding ordering kiosks. Kitchen equipment will also be upgraded.
  • J. Alexander’s opened a new concept in Houston. Called Merus Grill, the 7,900-square-foot operation will seat 200 guests and is described as a chef driven, boutique-style restaurant that provides a contemporary take on classic American cuisine.
  • Casey’s General Store will build a distribution center in Joplin, Mo. The new facility will service 400 to 600 Casey’s stores and is the company’s third warehouse.
  • Corporate Stirrings: Houlihan’s will be sold through bankruptcy court supervision to Landry’s for $400 million. However, the deal is subject to higher offers from other bidders. Not included in the sale are independent franchised operations. Matchbox Pizza will begin franchising to grow the chain more quickly and at a lower cost. Franchises will be located outside the company’s home base of Washington, D.C., with the first franchise unit planned to open this year in Charlottesville, Va. Papa John’s Pizza announced a major shakeup in its top management. Several executives will leave the company while others will receive new titles and responsibilities. Louisiana Apple LLC has purchased 19 Applebee’s locations in Wisconsin and now owns a total of 47 Applebee’s in 5 states.
  • Growth Chains: Houston-based Manchester Enterprises will open 18 Dunkin’ restaurants and 10 Baskin Robbins units in Texas. Chinese coffee and tea shop Luckin opened 900 locations in China in the third quarter, per the company. Miami Grill will open 3 locations in Orlando.
  • Comparable Store Sales Reports: Arcos Dorados up 12.7 percent, Bloomin’ Brands (combined down 0.2 percent, Outback up 0.2 percent, Carrabba’s up 0.1 percent, Bonefish Grill down 2.2 percent and Flemming’s up 0.4 percent), Carrols Restaurant Group up 4.5 percent, Chipotle Mexican Grill up 11.0 percent, El Pollo Loco (systemwide up 1.1 percent, company-owned locations up 1.6 percent and franchised up 0.6 percent), Noodles & Company (systemwide up 2.1 percent, company owned up 2.2 percent and franchised units up 1.6 percent) and Papa John’s Pizza (North America up 1.0 percent, company-owned units up 2.2 percent and franchised locations up 0.6 percent.)

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