Total retail sales increased in November but food services and drinking places sales declined from October.
The U.S. Census Bureau’s advance monthly retail sales report for November 2019 showed a 0.2 percent increase over October. Sales were up 3.3 percent compared to November 2018. In the first 11 months of this year total retail sales are up 3.4 percent compared to the same time period last year. The Census Bureau revised the advanced total retail sales number to +0.4 percent from +0.3 percent.
November sales at foodservice and drinking places declined 0.3 percent from October but were up 5.1 percent over November 2018. Overall, foodservice and drinking place sales are up 4.5 percent in the first 11 months of 2019 compared to the first 11 months of 2018. The advance sales report for October vs. September was revised to -0.1 percent, which represents an increase from the initial estimate of -0.3 percent.
While foodservice and drinking place sales have declined two straight months on a month-over-month over basis, sales have increased over the comparable month the year before and are outperforming the total retail market so far this year.
When considering these data please keep in mind it’s an advance report based on a small sampling. The findings can be revised when as the data sample grows.
The survey includes restaurants and bars only. Not included are hotels, resorts, retailers (c-stores, etc.), employee feeders, healthcare, schools and universities or military foodservice. Finally, some of the sales figures are adjusted for seasonal changes, holidays and trading days but not for menu price changes.
Economic News This Week
- Initial-jobless claims totaled 252,000, a jump of 49,000 for the week-ending December 7. This is the highest number of claims since September 30, 2017. The 4-week moving average totaled 224,000, an increase of 6,250. There have been several predictions recently that jobless claims would increase. On the other hand, big swings in the number of claims this time of year are common due to seasonal layoffs.
- Consumer credit increased at a seasonally adjust rate of 5.5 percent in October, per the U.S. Federal Reserve. Revolving credit, mostly credit card debt, rose at an annual rate of 8.75 percent. Non-revolving credit, namely auto loans, student loans, etc., increased at an annual rate of 4.25 percent.
- Business sector labor productivity decreased 0.2 percent in the third quarter of 2019. Output increased 2.3 percent while hours worked increased 2.5 percent. Unit labor costs increased 2.5 percent, reflecting a 2.3 percent increase in compensation per hour and a 0.2 percent decline in productivity.
- The Producer Price Index for Final Demand was unchanged in November on a seasonally adjusted basis. The index rose 0.4 percent in October after declining 0.3 percent in September. In the 12-month period ending in November the Index is up 1.1 percent. Food prices increased 1.1 percent in November.
- The Consumer Price Index Increased 0.3 percent in November. In the 12-month period ending in November the index is up 2.1 percent. For all items less food and energy the index rose 0.2 percent in November and rose 2.3 in the last 12 months ending in November.
- The Consumer Price Index for Food increased 0.1 percent in November. For the 12-month period ending in November, food prices rose 2.0. Food at home prices increased 0.1 percent in November and increased 1.0 percent in the last 12 months ending in November. Food away from home prices increased 0.2 percent in November and 3.2 percent in the last 12-month period ending in November. So, the spread between food prices at home and in restaurants continues. Basic economic principles tell us this must have some negative effect on eating out.
Foodservice News This Week
- IHOP plans to launch a new fast-casual concept. Called Flip’d By IHOP, the new operation targets what the chain calls “densely populated city centers.” The restaurant will emphasize “quality ingredients, speed, to-go and delivery.” The menu will borrow inspiration from IHOP but with a unique twist on flavors and portability. The company plans to open its first Flip’d next April in Atlanta. Other cities the chain continues to explore include New York City; Washington, D.C.; Denver and San Francisco.
- Domino’s Pizza franchisees in San Diego plan to hire 500 employees for their 57 stores. This includes full- and part-time jobs as well as management positions.
- Taco Bell promoted the opening of its first restaurant in Melbourne, Australia, by using the city’s well-known tram. Taco lovers provided their orders then hopped on the tram. By the time they arrived at the Taco Bell their orders were ready and brought out to the tram.
- McDonald’s formed a partnership with Ford. The hamburger chain will work with its suppliers to provide coffee bean residue from the roasting process to the car manufacturer, which will mix it with plastic and other ingredients to form into car parts.
- Corporate Stirrings: Muscle Maker Grill announces an initial public offering. The chain will price shares between $5.00 and $7.00 and hopes to raise up to $7 million. The stock will be listed on the Nasdaq.
- Growth Chains: IHOP signed 2 franchise agreements that should lead to 15 restaurants in the Toronto area during the next 7 years. Tropical Smoothie Café plans to open 30 cafes in Colorado.
- Comparable Store Sales Reports: Bad Daddy Hamburgers down 1.3 percent, Freshii Inc. down 3.7 percent, Good Times Hamburgers up 7.2 percent, Luby’s (All concepts down 3.7 percent, Luby’s Cafeteria down 3.2 percent, Fuddrucker’s down 5.5 percent, Cheeseburger in Paradise down 3.6 percent and combination units down 2.5 percent)
For details and same-store sales of other chains, Please Click Here for the latest Green Sheet.