This Week In Foodservice

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

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This Week in Foodservice

One Chain Strives to Avoid Bankruptcy While Another Receives a Significant Investment

With almost every restaurant in the U.S. either shut down or offering limited service, it is no surprise that the National Restaurant Association’s Restaurant Performance Index hit an all-time low in March. The Index dropped to 95.0 in March from the February reading of 101.9.

With most operators reporting sharp declines in same-store sales and customer traffic, the Current Situation Index hit 93.1, a decline of 9.6 points. This represents another all-time low.

The Expectations Index hit 97.0, a decline of 3.8 points. In addition, the National Restaurant Association believes operators do not expect any rapid improvements in their business environments.

As for the future, 33% of the operators surveyed plan to make a capital expenditure for equipment, remodeling and/or expansion in the next 6 months. Given the incredibly seriousness and complexity of the situation it might be considered amazing that a third of the operators are still willing to invest in their operations.

Economic News This Week

Foodservice News This Week

  • Georgia became the first state to allow restaurants to offer dine-in service. The move was not without controversy and restrictions, though. Most critics felt the decision to re-open dining rooms came too soon and without enough controls and data to justify it. Backers of reopening stress economic damage of keeping restaurants shut. Meanwhile other states moving towards reopening include South Carolina and Tennessee.
  • A Seattle ordinance limits how much third-party delivery services can charge restaurants. Like San Francisco did, Seattle will place a 15% ceiling on delivery costs. The Seattle law will remain in effect until dining areas are reopened. Other cities continue to explore similar steps.
  • BJ’s Restaurants receives a $70 million investment. The 209-unit chain has seen its takeout and delivery service sales nearly triple since stay-at-home mandates took hold, but its total sales volume is still down 70%. BJ’s CEO said the $70 million cash infusion puts the chain in a better financial position when it reopens. Two investment firms were the source of the funds, Act III Holdings and funds managed by T. Rowe Price Associates. Act III is headed by Ron Shaich, the founder of Panera Bread.
  • California Pizza Kitchen strives to stay out of bankruptcy. The chain hopes to restructure its debt as it seeks a $30 million bridge loan. CPK was purchased by Golden Gate Capital in 2011 and taken private. The Wall Street Journal stated that two years after the purchase Golden Gate borrowed money to pay itself a multimillion-dollar dividend which seems to put the chain in a difficult financial position. Earlier this year the company hired financial advisors to sell the chain. Five bids were received but the coronavirus outbreak put an end to the sales process. read:
  • Comparable Store Sales Reports: Applebee’s down 10.6%, Baskin Robbins up 1.8%, Burger King down 6.5%, Chipotle Mexican Grill up 3.3%, Domino’s Pizza (systemwide up 1.6%, company owned locations up 3.9% and franchised units up 1.5%), FAT Brands up 0.2%, IHOP down 14.7,Popeye’s Louisiana Kitchen up 29.2%, Starbucks down 3.0%, YUM Brands (KFC down 3.0%, Pizza Hut down 7.0% and Taco Bell up 1.0%) and YUM China (KFC down 11.0% and Pizza Hut down 31.0%).

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

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