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

Bloomin’ Brands Gave a Sales Party but no one Came, Growth Plans for Third Party Food Delivery, Texas Roadhouse is “Hurrying Slowly” With Their Bubba 33 Chain

The financial reports from three major broadline distributors often offer some insight into how well the foodservice industry has been performing.

Sysco Corporation: For the 13-week period ending December 28, 2019, U.S. sales totaled $10.4 billion, an increase of 3.2 percent. Case volume within the U.S. broadline operation grew 2.0 percent. Net earnings for the entire corporation increased 43 percent from the corresponding quarter a year ago.

U.S. Foods: For the quarter ending December 28, 2019, net sales totaled $6.9 billion, an increase of 14.8 percent. Total case volume increased 12.3 percent. Net income totaled $92 million, an increase of $8 million.

The Performance Food Group Company: For the quarter ending December 9, 2019, net sales hot $6.1 billion, a 31.5 percent increase. Total case volume grew 8.7 percent. Net income totaled $41.9 million, a decline of 4.4 percent.

While financial analysts could find some weaknesses in the performance of the players above, overall sales volume remains at least moderately strong. This, in turn, should translate into growth at the foodservice operator level. Critics might argue that the “Big Three’s” growth is not from their customer sales but at the expense of smaller distributors. This is possible but unlikely. A number of people in the industry expect some real growth for the operators.

Economic News This Week

Foodservice News This Week

  • Three months after Bloomin’ Brands announced the company was examining strategic alternatives, no potential buyers have stepped forward, per published reports. In the meantime, the company has concentrated on analyzing all aspects of the business and has succeeded in reducing costs. Bloomin’s management plans to save $40 million in the next 2 years. The company notes one exception to the no sales offers: Outback’s Brazilian operation drew several potential buyers but given the success of the steak brand has in the country there seems to be some reluctance to sell.
  • Food delivery companies are very active and they are doing more than delivering food. The Wall Street Journal reports food delivery service firms are considering numerous financial moves including mergers, Initial public offerings, adding private investors, and acquisitions. This remains a very crowded field and with very elusive profits. The delivery companies were in a rush to grow so they expanded geographically and tried to sign up foodservice operators. When operators balked at the fees, the delivery companies offered service to the consumers, frequently with some sort of deal as an incentive. The bypassed restaurants were not pleased especially if the delivery company failed to offer good service and irritated the customers. The delivery companies say they are not for sale but might consider consolidation. GrubHub’s CEO stated that the longer the current business model stays in place, the more money will be lost.
  • Texas Roadhouse is taking it slow and steady with its expansion plans for the company’s Bubba 33 sports bar concept. Bubba 33 started in 2014 with 3 locations and was up to 28 last year. This year’s plan calls for adding seven more. The company has expressed concern that it might design the concept too quickly and have to go back and make a lot of changes later.
  • Corporate Stirrings: Grand Parade Investments, Burger King’s master franchisee in South Africa, has sold to the investment firm of Emerging Capital Partners. The sale includes over 90 Burger King units. NPC International, a large Pizza Hut franchisee, is considering various options including bankruptcy, as the company wrestles with $1 billion of debt.
  • Growth Chains: The Barcelona Wine Bar, currently with 18 units, plans to open 2 to 3 locations a year for the foreseeable future. Chicken Salad Chick plans to open 50 restaurants this year as part of the chain’s goal of reaching 400 locations by 2025. The Cheesecake Factory will open as many 20 restaurants this year, including 6 Cheesecake Factories, 6 North Italia restaurants and 8 operations from the Fox Restaurant Concept group.
  • Comparable Store Sales Reports: Domino’s Pizza (U.S. systemwide locations up 3.4 percent, company owned units up 3.9 percent and franchised up 3.3 percent), Ruth’s Chris Steakhouse up 1.4 percent, Shake Shack down 3.6 percent and Texas Roadhouse (company owned units are up 4.4 percent and franchised locations are up 3.4 percent).

For details and same store sales of other chains, Please Click Here for the latest Green Sheet.