This Week In Foodservice

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


This Week in Foodservice

Advance Retail Sales for May Look Good, Food Truck Sales Grow, Foodservice Prices Continue to Outpace Retail Prices

Advance U.S. retail sales report for May looks good. Food truck sales grow despite the regulatory hassle. Foodservice prices continue to grow faster than retail prices. Consumers change their approach to dinner. These stories and a whole lot more This Week in Foodservice.

The Census Bureau’s advance report for May has U.S. total retail sales up a strong 0.8 percentage points from April and up 5.9 percent from May of last year. For the first 5 months of this year total retail sales have risen +5.2 percent. The Bureau raised the advance estimate for April to +0.4 percent from the +0.3 percent originally reported.

Foodservice & Drinking Place sales rose 1.3 percent in May compared to April and were up 5.1 percent from May 2017. The Census Bureau reported foodservice and bar sales increased 3.7 percent in the first 5 months of this year.

If last month’s 1.35 percent increase in sales holds up, it will be the largest month over month increase since January of 2017.

There are some factors to take into consideration when using this data. First, the Census Bureau’s advance report is based on a limited sample and may be revised 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

Foodservice News This Week

  • Food truck sales totaled $960 million and will drive to $1.1 billion by 2022 according research by IBISWorld. But a USA Today article contends the food truck business is loaded with permits, fees and regulations. A food truck owner in Des Moines, Iowa, says paperwork and fees total $2,000 and similar charges occur for operating in surrounding communities. Los Angeles requires operators to move their trucks every hour. Getting a permit in New York can take 15 years. Boston truck operators can pay as much as $38,000 annually in fees. And, getting the required permits in our nation’s capital takes 23 separate visits to local agencies. The story did not provide information on getting licenses and permits for brick-and-mortar restaurants.
  • The Consumer Price Index for Food was flat in May with the price for food at home down 0.2 percent and prices for food away from home up 0.3 percent for the month. In the past 12 months food prices have risen 1.2 percent with the index for food at home rising 0.1 percent and the price for food away from home up 2.7 percent.
  • U.S. consumers will continue to eat dinner at home “but with modern twists,” according to The NPD Group. Last year Americans ate almost 100 billion dinners and shared most of these meals with others in the home. Consumers now have access to a wide variety of options — grocery delivery, meal kits, grocerants (supermarkets restaurant quality meals), online ordering and mobile apps. People now lean toward foods like tacos, “multicomponent” meals that combine a protein, a starch and a vegetable, rather than eating them separately as a “trinity meal.”
  • In N Out Burgers closed all of its Texas locations for two days last week, citing poor quality buns. The name of the bun supplier was not released but the chain’s executive VP did say food safety with the buns was not an issue.
  • Whataburger and raising Cane’s encounter bun problems in Texas, too. Whataburger said its problem extended into parts of Oklahoma and Arkansas as well. In N Out was the first to report bun problems. The other two chains said the problems were with white buns and Texas toast. Unlike In N Out, Whataburger and Cane’s remained open and substituted products like wheat buns. One report said the quality problem was with the yeast used in the buns.
  • The Tom Thumb supermarket chain plans to open its first c-store. It will be located in Dallas across the street from a Tom Thumb supermarket. The supermarket will supply the c-store with sandwiches, salads, cut fruit and hot foods for takeout. Tom Thumb plans to open the c-store next year. There was no indication if Tom Thumb plans to open additional c-stores.
  • Corporate Stirrings: Quiznos has been purchased by High Bluff Capital Partners, a San Diego based private equity firm specializing in corporate turnarounds. Since 2007 the Quiznos chain has shrunk to 800 units from 5,000. While the price of the acquisition was not released, it was announced the chain’s headquarters will remain in Denver. Polar Star Capital Partners, a new private equity firm, has purchased a controlling interest in Meridian Restaurants Unlimited. Meridian owns 114 Burger King restaurants and recently purchased 10 Chili’s and El Pollo Loco restaurants. The transaction also has funds to acquire an additional 25 Burger King restaurants in Kansas and Nebraska from Horizon Food Service, Inc. The total amount of the deal was not disclosed but it is believed to be in excess of $80 million.
  • Growth Chains: Checkers will open 60 locations in New Jersey. Dippin Dots and Doc Popcorn will open 10 combo units in China by May 2019. Wetzel’s Pretzel’s has opened its first location in China with 50 more in the development pipeline. Walk-Ons Bistreaux & Bar plans to open locations in Florida, Louisiana, Mississippi, and Tennessee. The Angry Crab Shack plans to open 100 restaurants nationwide in the next 5 years. In N Out Burger will expand into Colorado where it may open as many as 50 locations. Fogo de Chao plans to open 100 restaurants long term starting with 4 to 6 locations a year.
  • Comparable Store Sales Reports: Casey’s General Store down 1.3 percent and Dave & Buster’s down 4.9 percent.

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