U.S. retail sales for the month of February declined 0.2 percent compared to January, per the U.S. Census Bureau. Sales for the month, though, were up 2.2 percent from February of 2018. The Bureau also revised the advance sales number for January to +0.7 percent from +0.2 percent.

February foodservice and drinking place sales inched up +0.1 percent compared to January. Compared to February 2018, February sales this year were up 3.6 percent.

There are some cautions and limitations when considering this report. The Census Bureau labels the data as an “advance” report as it is based on a small initial response. When a larger sample is analyzed, the findings maybe revised. The Census Bureau only surveys restaurants and drinking places. A significant part of the foodservice industry is not included. Not surveyed are hotels, motels, resorts, retailers (supermarkets, convenience stores, etc.) employee feeding, healthcare, colleges, Schools K-12, and military feeding. Some of the sales figures are adjusted for holidays, weekends and seasonal variations but the of the data is adjusted for menu price changes. 

Economic News This Week

  • The Institute for Supply Management’s Manufacturing Index showed expanding activity in March. The Index hit 55.3, an increase of 1.1 points. (Any reading that exceeds 50 indicates growing activity.) The Production Index hot 55.8, an increase of 1.0 point. The New Orders Index rose 1.9 points for a final reading of 55.5. The Employment Index increased 5.2 points to a level of 57.5. But the Backlog of Orders Index fell 1.9 points to a final reading of 50.4. Of the 18 manufacturing industries in the studies, 16 reported growth in March.
  • The Institute for Supply Management’s Non-Manufacturing Index indicated business activity growth increased at a slower pace in March. The Index fell 3.6 points from February to a reading of 56.1 in March. (Any reading greater than 50 means expanding activity.) The Business Activity Index fell 7.3 points to a reading of 57.4. The New Orders index dropped 6.2 points for a reading of 59.0. The Backlog of Orders Index rose 1.0 point to a final level of 56.5 while the Employment Index inched up 0.7 point for a final level of 55.9. Of the 18 service industries in the survey, 16 reported growing in March with the Accommodations & Foodservices sector having the fifth highest growth.
  • New orders for manufactured durable goods decreased 1.6 percent in February, according to the U.S. Census Bureau’s advance report. A decline in transportation equipment orders drove the decrease. Excluding transportation, new orders for durable goods were up 0.1 percent. Shipments of manufactured durable goods increased 0.2 percent for the month.
  • Sales of U.S. automobiles fell 3.1 percent in March, with most major manufacturers experiencing declining sales. The March annualized rate was 17.4 million vehicles, beating both forecasts and the February annualized rate. Auto executives hope this is a good sign for the spring selling season.
  • The U.S. Economy zdded 129,000 jobs in March, per ADP. This was less than most forecasts and the smallest increase since September.
  • Initial-jobless claims dipped by 10,000 resulting in a final reading of 202,000 for the week-ending March 30. The 4-week moving average was 213,500, a decline of 4,000. This measurement of the jobs market certainly shows a healthy situation.
  • The U.S. Economy added 196,000 new jobs in March according to the Bureau of Labor Statistics. The Bureau also reported that unemployment remained at 3.8 percent.

Foodservice News This Week

  • Foodservice operators hired 27,300 new employees in March, according to the U.S. Bureau of Labor Statistics. This means the foodservice industry was responsible for 15 percent of last month’s new hires.
  • FATBurger’s story about a name change was just that – a story. As suspected, FATburger’s announcement that the company was changing its name to Skinny Burger was an April Fools’ Day joke, per a press release from FATBurger Brands.
  • The Labor Department rolled out a proposal to simplify the joint employer rules. The previous administration in Washington had changed the long-standing regulation, making it easier to declare firms like McDonald’s joint employers and hold them responsible for labor law violations like wage and hour rules and also easier to unionize workers.
  • McDonald’s made an investment in a mobile app developer. New Zealand-based Plexure has worked with McDonald’s for some time in developing the chain’s Global Mobile App for use in 48 countries. The amount of the investment in Plexure was not given.
  • Walmart appears ready to open a restaurant in a store planned for the Pittsburgh area. The retail giant entered an auction for a license to sell beer that requires food be served regularly. Walmart’s winning bid was $65,000.
  • Corporate Stirrings: FAT Brands Inc. continues in the acquisition mode with the purchase of Yalla Mediterranean, a seven-unit chain headquartered in Los Angeles. In July the company completed its acquisition of Hurricane Grill & Wings. GPS Hospitality purchased 75 Pizza Hut restaurants located in Alabama, Georgia, Kentucky and Tennessee. GPS is a franchisee of Burger King and Popeye’s Louisiana Kitchen with more than 400 units. CEC Entertainment Inc, parent company of the Chuck E. Cheese chain, will merge with Leo Holdings Corp. LHC to form a new public company named Chuck E. Cheese Inc. Leo Holdings Corp is a publicly traded special purpose acquisition company. The new company is expected to have an initial enterprise value of about $1.4 billion and will trade on the New York Stock Exchange.
  • Growth Chains: The Lazy Dog chain will open two restaurants in Texas and one in Georgia. The Nekter Juice Bar plans to have 400 locations by 2020. Chicken Salad Chick, which opened 28 locations in 2018, plans to open 45 this year.
  • Comparable Store Sales Reports: Arcos Dorados up 7.5 percent and Dave & Buster’s up 2.9 percent.

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