This Week In Foodservice

Jerry Stiegler aggregates key industry information and provides brief analysis to help foodservice professionals navigate the data.


Restaurant Sales Eke out 2017 Increase, Connecting Christmas Shopping with Restaurant Sales, and Wahlburgers Signs a Deal with Meijer

The National Restaurant Association says the industry “posted a modest increase in November.” Restaurants sales increased .84 percent in 2017, according to government data. Consumers opened their wallets for Christmas but did restaurants share in the spending? Wahlburgers signed a deal with the Meijer chain. These stories and a whole lot more This Week in Foodservice.

The National Restaurant Association’s Restaurant Performance Index improved a bit in November, rising to 101.1 from 100.9 in October. Both major components of the Index rose in November. The Current Situation Index reached 99.6. Despite the 0.1 percent increase, this part of the Index remained in contraction mode. This also represented the eighth consecutive month in which operators reported a net decline in customer traffic.

The Expectations Index hit 102.6, an increase of 0.3 percent for November, as operators became more optimistic about their own sales as well as about the direction of the economy as a whole.

Unfortunately, the improvement in the overall index did not translate into an improved picture for operators’ investments. In the last 3 months, 50 percent of operators report making an investment in equipment, expansion and/or remodeling. This is down from 67 percent who reported similarly in the October survey.

As for the future, 60 percent of those surveyed reported they plan on spending for equipment, expansion and/or remodeling in the next 6 months vs. 64 percent who had similar plans in October.

In summary, it appears from the data above that the industry continues to bump along perhaps with a little growth.

Economic News This Week

Foodservice News This Week

  • What did America spend last year? The web site selected 50 consumer products and services and analyzed spending provided by the Bureau of Economic Analysis. Many of the findings were to be expected. Healthcare spending was way up and postal spending was way down. Other results were surprising. For example, spending for books, magazines and newspapers rose considerably. As for restaurants and bars, dollar spending was put at $5.61 trillion which was up 0.84 percent over 2016 and a 15.65 percent increase in the past 10 years. restaurants and bars accounted for 4.3 percent of total consumer expenditures. (Note: The data is for the first 11 months of 2017.)
  • Did strong Christmas sales carry over to restaurants? Retailers are generally trumpeting a very good selling season (and in some cases a sigh of relief.) It is true that e-commerce drove the increase, rising 18.1 percent from Nov. 1 through Dec. 24, according to data from Mastercard. But, the brick and mortar stores did well, too, with Mastercard finding sales for the period up 4.9 percent vs. 3.7 percent last year. It has been long recognized that shopping trips outside the home frequently involve a meal or two. For some consumers it could just be a visit to a mall food court but others hit fancier operations. Early indications are December was a good month. We’ll find out when the Census Bureau data arrives later this month.
  • Wahlburgers signed a deal with grocer Meijer, which calls for the hamburger company to open several restaurants at the supercenter’s locations in Michigan and Ohio.
  • UberEats is bigger than Uber’s ride-hailing business in 19 European cities.  Just 3 years old, the food delivery division was on pace to hit $3 billion in sales by the end of last year. On the negative side, some European countries want to classify UberEats couriers as employees, which will likely increase the cost structure and may well increase fees that have to be passed on to the consumers.
  • Corporate Stirrings:  J. Alexander’s Holdings has scheduled a special shareholders meeting in January in order to attain stockholder approval for the purchase of Ninety Nine Restaurant & Pub. Church’s Chicken sold 70 company-owned units in Texas to a new franchisee, Ampler Chicken LLC. Church’s also revealed the pending sale of six restaurants in the Atlanta area to an existing franchisee. The amounts paid for the purchase for the two deals was not stated.
  • Growth Chains: Papa John’s inked a development deal to open 5 restaurants in the Bahamas in the next 36 months. Cool Greens has developed a franchise program which the chain plans to take the company nationwide. Tropical Smoothie has signed a franchise agreement for eight cafes in Florida. Falafel chain Taim will open five locations in New York and one in Washington, D.C. Mamoun’s, the New York City-based falafel chain, signed a franchise agreement for five restaurants in the Chicago area. Dunkin’ Donuts opened 16 restaurants in New York last year  and now has 612 locations in the Big Apple, making them the largest operation in the New York City area in terms of units.
  • Comparable Store Sales Reports: Ark Restaurants up 0.9 percent and Darden Restaurants (All brands up 3.1 percent, Bahama Breeze up 2.5 percent, Capital Grille up 3.8 percent, Cheddar’s Scratch Kitchen down 2.0 percent, Eddie V’s up 6.8 percent, LongHorn up 3.8 percent, Olive Garden up 3.0 percent, and Season’s 52 down 0.5 percent.)

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