The Census Bureau’s Advance Monthly Sales Estimate fell 0.3 percent in September but increased 4.1 percent compared to September 2018.

The September advance estimate for sales in foodservices and drinking places was up 0.2 percent from August and up 4.9 percent from September last year. In the first 9 months of 2019 restaurant and bar sales have risen 4.1 percent from the same time period in 2018.

When considering the Census Bureau data keep in mind the advance estimate is based on a limited sample size and is subject to revision.

The Census Bureau only surveys restaurants and bars. Excluded from the research hotels, motels, resorts, c-stores and other retailers, employed feeding, schools, colleges & universities and military feeding.

Finally, sales data is adjusted for seasonal differences, holidays and weekends but are not adjusted for menu price changes.

Economic News This Week

• Initial-jobless claims hit 214,000, an increase of 4,000 for the week ending October 12. The-4 week moving hit 214,750, an increase of 1,000 claims. The jobless claims data remains at a historically low level.
• The N.Y. Federal Reserve’s Empire State Manufacturing Survey hit 4.0 in October, an increase of 2.0 points. (Any reading greater than zero indicates growth.) The New Orders Index was flat from September, but the Shipments Index was up 7.2 points. The Unfilled Order Index dropped to minus 9.9, which may indicate significantly lower activity in the future.
• Is the U.S. headed for a recession? The answer is yes. The tricky part is knowing when. Two years ago there were a few dire predictions that a recession was just months away. Right now it looks like the U.S. economy is safe for at least the next couple of quarters. Some forecasters, though, believe a slowdown in the freight hauling business represents an indication an economic downturn is on the horizon. Two weeks ago, several trucking companies laid off drivers. Last week, the International Air Transport Association said air freight volumes have fallen for 10 consecutive months and are down 3.3 percent through August of this year. While the IATA blames the decline on the U.S. trade war with China, there could be more basic problems at play.
• U.S. industrial production fell 0.4 percent in September, per the Federal Reserve. This comes after a 0.8 percent August increase. Manufacturing production fell 0.5 percent in September. Mining production fell 1.3 percent while utilities output grew by 14 percent. Capacity utilization for the industrial sector was 77.5. a 0.4 percent decline.
• The Philadelphia Federal Reserve’s Manufacturing Business Outlook Survey had mixed indicators in October. The Business Activity was 5.6 in October, down from 12.0 in September. (Any reading greater than zero means increasing activity.) The New Orders Index hit 26.2 in October, up from 24.8 in September. Shipments were 18.9 in October, down from fell from 26.4 in September. Unfilled Orders hit 18.8 in October compared to 17.6 in September. The Number of Employees Index hot 32.9 in October, up from 15.8 in September. In contrast, the Average Employee Workweek Index was 10.8 in October compared to 13.0 in September.
• Building permits for privately owned homes declined 2.7 percent in September from August. The number of building permits issued in September was up 7.7 percent compared to September 2018. Permits for single family homes rose 0.8 percent in September compared to August.
• The Conference Board’s Leading Economic Index declined by 0.1 percent in September. A Conference Board spokesperson believes the economy is growing slowly and will continue to do so into 2020.

Foodservice News This Week

• DoorDash debuted its first shared kitchen concept. The Redwood City, Calif., facility offers delivery, pickup and group order options for Nation’s Giant Hamburgers, Rooster & Rice, Humphry Slocome and The Halal Guys.
• Convenience stores will grow sales faster than most offline retail channels in the next five years, according to projections from e-commerce insights company Edge by Asecential. C-stores sales will grow at an annual rate of 5.4 percent, while discount stores will grow at a 5.3 percent clip and non-food discount stores at 5.0 percent. Except for membership club stores, other off-line retailers are expected to have annual growth rates of 3.0 percent or less. Consumers’ continued emphasis on low price and convenience will drive these results.
• Wendy’s will make breakfast simple this time. The quick-serve chain’s last attempt at breakfast required adding 45 new menu items. Next year’s breakfast program will involve just 18 menu items. The last bite at breakfast required $10,000 in new equipment. The 2020 breakfast rollout will leverage Wendy’s existing equipment package. Wendy’s management believes breakfast will quickly rise to 10 percent of total sales.
• Corporate Stirrings: Domino’s UK will withdraw from Iceland, Norway, Sweden and Switzerland. While the company feels the markets remain attractive, it feels Domino’s is “not the best owners of these businesses.” ARC Group has acquired WingHouse Bar & Grill from Tampa based Soaring Wings LLC for $18 million. The deal includes $12 million in cash and $6 million in stock. Del Frisco’s Grille will close at least four locations before finalizing the Landry’s purchase of Del Frisco’s. Pinstripes struck a minority investment deal with Simon Property Group that includes new leases for three future locations within Simon complexes Pinstripes, an upscale restaurant and entertainment concept signed a similar agreement with Brookfield Properties in April.
• Growth Chains: Schlotzky’s Austen Eatery signed a development agreement for 10 units in South Texas with Lozano, LLC. Wendy’s development plans calls for growing domestic locations by 1 percent to 2 percent annually and by 10 percent to percent outside the U.S. The chain has 6,000 locations in the U.S. and 950 outside the country. Mooyah Burgers Fries & Shakes opened a unit in Brentwood, Tenn., and plans to add nine more restaurants in the Nashville area.

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