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

Good Quarter for Big Three Distributors, Moe’s new Prototype and IHOP’s Gimmick Success

Last week the major broadline foodservice distributors reported financial results for the quarter ending Sept. 29. Sysco and Performance Food Group reported increased dollar sales while US Foods said the company experienced a drop of 0.8 percent in sales for the quarter. All three distributors said case sales to independent operators increased. All three had significant increases in profits and all three experienced increases in earnings per share.

Because of these distributors’ penetration into the foodservice market their sales indicate to some that foodservice operators are doing well, too. But others would dispute this, believing that the three giants could be growing by taking market share from smaller distributors. In any case, a more detailed look at the distributors’ financial data is shown below.

Economic News This Week

Foodservice News This Week

  • Moe’s Southwest Grill will build a new prototype restaurant near the company’s Atlanta headquarters. Called “The Oasis,” the new design will also serve as test kitchen for the chain.
  • Foodservice operators look to hire senior citizens to offset today’s tough job market. With a shortage of teenagers, restaurants, including McDonald’s, are turning to older workers. The U.S. Bureau of Labor Statistics estimates between 2014 and 2024 the number of workers between 16 and 24 will fall by 1.4 percent while the number of working Americans aged 65 to 74 will increase 4.5 percent. And, it appears that the seniors will not just be mopping floors and flipping burgers but moving into management positions as well.
  • IHOP’s fake name change seems to have worked. While there were a number of critics of the marketing plan to introduce the chain’s Ultimate Steakburger, the company is pleased with the results. For a short time after the name change to IHOb (International House Of Burgers), burger sales quadrupled. And since June, IHOP has had positive comparable store sales every day at dinner.
  • Nouria Energy Corporation will upgrade and rebrand its +100 c-stores in the next 3 years. The newly designed stores will offer a wider menu selection including fresh, healthy foods and new age beverages.
  • Philadelphia-based Honeygrow closed its three Chicago locations barely a year after entering the market. The fast-casual salad and stir fry chain said Chicago sales never really took off. An industry consultant said “Simply put, it takes a lot to standout as a fast-casual concept these days.”
  • Corporate Stirrings: Papa Murphy’s is “exploring financial and strategic alternatives” that would include but not be limited to the sale of the company. Papa Murphy’s has hired a financial adviser to assist in the review. PGHC Holdings Inc., parent company of Papa Gino’s Pizzeria and D’Angelo Grilled Sandwiches, reached an agreement to sell the company to Wynnchurch Capital, a private equity firm. PGHC Holdings filed for protection under Chapter 11 of the U.S. Bankruptcy Code. Wynnchurch will provide additional liquidity during the bankruptcy process. The court must approve the proposed sale. The plan is to use the funds to modernize the firm’s 140 company-owned stores. Papa Gino’s broke into the news when they abruptly closed roughly 50 of the chain’s restaurants with no explanation. The Tilted Kilt chain is being sold for $10. The purchaser is the ARC Group, owner of Dick’s Wings & Grill. ARC will also assume $1.8 million and future payment obligations of $1.5 million. Taco Bueno has announced the chain, using Chapter 11 of the U.S. Bankruptcy Code, has been sold to Sun Holdings a multi concept operator with more than 800 locations in 8 states. Casey’s General Store has purchased the Tri-Par Oil Company and will convert Tri-Par’s seven convenience stores to Casey’s.
  • Growth Chains: Starbucks plans to open 100 stores a year for the next 5 years in Japan. In-N-Out Burger will open 3 locations in Houston.
  • Comparable Store Sales Reports: Chuy’s Holdings up 0.5 percent, Kona Grill down 14.1 percent, Papa John’s (North America down 9.8 percent, company owned down 13.2 percent and Franchised down 8.6 percent), Papa Murphy’s Holdings (domestic down 2.1 percent, company owned down 6.9 percent and franchised down 1.8 percent), Rave Restaurant Group (Pie Five Pizza down 1.8 percent and Pizza Inn up 2.3 percent), Red Robin Gourmet Hamburgers down 3.4 percent and Wendy’s down 0.2 percent.

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