This Week In Foodservice

The editorial team aggregates key industry information and provides brief analysis to help foodservice professionals navigate the data.


Restaurant Sales Edge Up, Steak ‘n Shake Franchising Program Showing Trouble and MOD Pizza Opens New Flagship Store

Total U.S. retail sales were down 0.2 percent in April from March according to the Census Bureau’s Advance report for the month. However, retail sales are up 3.1 percent over April of last year. The Census Bureau also revised advance sales for March up to +1.7 percent from +1.6 percent. In the first 4 months of this year, total retail sales are up 3.0 percent.

Foodservices and drinking places did better than the retail market as a whole with April over March sales rising 0.2 percent and increasing 5.7 percent over April 2018. In the first 4 months of this year

For comparison, grocery store sales are also up 0.2 percent in April over March but only up 2.0 percent over April 2018 and up just 2.5 percent in the first 4 months of 2019.

While declining retail sales is certainly a negative for the economy as a whole, it is encouraging to see restaurant sales increasing.

There are some limitations and cautions about this data. The numbers are described as “advance” since they are based on a limited sample and as such can be, and frequently are, revised when a larger sample is analyzed.

The sales data is for restaurants and bars only. The Census Bureau does not survey hotels, resorts, clubs, employee feeding, healthcare, schools and colleges or military feeding operations.

Some sales statistics are adjusted for calendar changes, holidays, weekends but not for menu price changes.

Economic News This Week

Foodservice News This Week

  • Steak ‘n Shake’s move to a franchise model may be critical to survival. According to CBS News, the chain is “hemorrhaging cash,” with a $18.9 million operating loss in its first quarter. The report says that CEO Sardar Biglari’s suggested that Steak ‘n Shake could save $1 million a year by eliminating the cherry on top of milkshakes. The comment left shareholders at the company’s annual meeting “less than impressed.”
  • John Schnatter sold nearly 115,000 shares of Papa John’s Pizza Stock. Worth $6 million, the price per share was $52.69. Schnatter is the founder and former chairman of Papa John’s Pizza. He parted ways with the company over some controversial comments he made. He no longer holds any official position with the company but still owns more than 9 million shares of the chain.
  • MOD Pizza will open a flagship restaurant in its home city of Seattle. Located in famous Pioneer Square, the new facility will test new products and equipment.
  • McDonald’s will allow franchisees to pick breakfast menu items for all-day sale. McDonald’s and their franchisees have had some difficulties but the move shows Big Mac can be flexible sometimes. Actually, the move is not without precedent. The corporation allowed its franchisees to select menu items for McPick promotions.
  • Americans love to eat out and 56 percent do so 2-3 times a week. That includes stops for takeout and food delivered from restaurants. The data is courtesy of a study by a research company named Fourth. Among other findings were delivery is becoming more common (no big surprise there) and 10 percent of men eat out everyday. To see other findings from the survey, please click on the follow link.
  • Taco Bell enters the hotel business in Palm Springs, Calif. Details, including exact location and pricing, are lacking but rooms will be available for a short time this summer.
  • Corporate Stirrings: Jack in the Box announced they will not put the company up for sale but will instead refinance. Bankrupt Kona Grill will be auctioned off in July. One of the chain’s co-founder’s has all ready submitted a bid.
  • Growth Chains: Restaurant Brands International, parent company of Burger King, Popeye’s and Tim Hortons, plans to grow to 40,000 global locations in the next 8 to 10 years. Rally’s plans to open 10 restaurants in Fresno, Calif. Potbelly Sandwich Shops will open 50 franchised locations in the next 5 years. P.J.’s Coffee of New Orleans plans to open 180 locations in Texas in the next 10 years. Smoothie King has signed an area development agreement for a total of 10 stores in Phoenix, Tucson, Ariz. and El Paso, Texas.
  • Comparable Sales Reports: CEC Entertainment up 7.7 percent, Diversified Restaurant Holdings up 4.2 percent and Jack in the Box (system up 0.2 percent, company up 0.6 percent and franchised up 0.1 percent.)

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