Purchasing managers report strong June growth. Craftworks holdings finds new ownership. Buffets and salad bars are gone thanks to COVID-19 and when they will be back is anyone’s guess. Dunkin’ will close 450 small stores. These stories and a whole lot more This Week in Foodservice.
The pandemic closed buffets and salad bars. Is this the wave of the future?
Even Las Vegas casinos, some of which claim to have invented the buffet, have done away with them at least for now.
Some operators have gotten creative in trying to keep the salad bars alive. Some grocers now place pre-made salads and boxed meals into these spaces instead. And other operators have turned to automation to help provide made-to-order salads. The future of this self-service stalwart is still up in the air.
Exactly what the future holds is anyone’s guess.
Economic News This Week
- Initial jobless claims totaled 1.32 million, a decline of 99,000 for the week-ending July 4. The 4-week moving average totaled 1.44 million, a decline of 63,000. The number of claims continues to decline but at a very slow rate.
- The Institute for Supply Management’s Production Manufacturing Index grew in June. After declining in April, the index has grown in two consecutive months. The PMI increased 9.5 points for a reading of 52.6. The New Orders Index shot up 24.6 points for a reading of 56.4. The Production Index also showed strong growth by rising 24.1 points for a reading of 57.3. The Order Backlog Index rose 7.1 points for a reading of 45.3. The Employment Index increased 10.0 points for a reading of 42.1. Of the 18 manufacturing industries covered in the study, 13 reported growth.
- After contracting in April and May, the Institute for Supply Management’s Non-Manufacturing Index grew in June. The index hit 57.1, an increase of 11.7 points. The Business Activity/Productivity Index hit 66.0, a 25-point increase. The New Orders Index hit 61.6, a 19.7-point increase. The Backlog of Orders Index hit 51.9, a 5.5-point increase. Of the 17 non-manufacturing industries studied 14 reported growth in June. The Accommodations & Foodservices sector was third in growth.
- Consumer borrowing declined 5.3% in May, per the Federal Reserve. This marks the third consecutive month consumer borrowing declined, the first time that has happened in a decade. Revolving credit, mostly credit card debt, dropped 28.6%. Non-revolving credit, car loans, student loans, etc., inched up by 2.3%.
- The Producer Price Index for Final Demand fell 0.2% in June, per the Bureau of Labor and Statistics. The Trade the Producer Price Index increased by 0.3% in June. In the 12-month period ending in June the PPI is down 0.8%. Food and feed prices were down 5.2% in June.
- The Consumer Price Index increased 0.6% in June. This snaps a streak of three consecutive monthly declines. Excluding food and energy costs, the Consumer Price Index was up 0.2% in June. In the 12-month period ending in June, the index is up 0.6%.
Foodservice News This Week
- Another bankrupt chain is saved. Craftworks Holdings, the parent of Logan’s Roadhouse, Old Chicago and several other brewery restaurants declared bankruptcy in March. The company had gone from 18,000 employees to 25 and seemed destined to dissolve under Chapter 7 bankruptcy when Fortress Investment Group stepped in and offered $93 million for the concepts. Fortress Investment’s affiliate, SPB Hospitality, owns Rock Bottom Brewery, Gordon Biersch Brewery and numerous other chains, has reopened 194 locations and has increased employment to 6,500 with expectations of reaching 10,000 to 11,000.
- Consumer prices for food increased 0.6% In June. In the 12-month period ending in June food prices increased 4.5%. The price for food at home increased 0.7% in June while the price for food away from home increased 0.5% for the month. In the 12 months ending in June of this year food prices were up 4.5%, including prices for food at home were up 5.6% and prices for food away from home were up 3 .1%.
- The Trump administration released the names of payment protection plan borrowers. Which foodservice operators got the dough? P.F. Chang’s, Famous Dave’s, Granite City Food & Brewery, Black Angus Steakhouse LLC, TGI Friday’s and Five Guys received funds through the program. Ruth’s Hospitality received the $20 million but returned the money. A complete list of those receiving money can be found on Small Business Administration’s website.
- Dunkin’ plans to close 450 stores, all of which are in Speedway gas stations and most of which are in the eastern U.S. A Dunkin’ spokesperson said these represent low-volume units which frequently have limited menus. The units to be closed account for less than 0.5% of Dunkin’s system wide sales.
- 7-Eleven squares off with franchisees over a new California law defining employees and business owners. 7-Eleven franchisees support the law while the company, SEI, tries to get exempt from it. The franchisees contend the agreement with the company won’t let them control their own business. The franchisees own none of their stores’ equipment or fixtures, are not party to the lease for their locations and must deposit all sales receipts into SEI’s bank account. Under terms of their agreement, franchisees are not allowed to change the setting of their stores’ thermostats.
- Foodee, an office catering platform for individually packaged meals, has acquired Chewse, an office catering company servicing the San Francisco Bay Area, Austin, and Chicago. This is the first acquisition for the Canadian company. Foodee will transition Chewse clients on family-style plans to individually packaged meals.
- Shake Shack issued a business update for its second quarter. Like some other chains (Burger King, etc.) Shake Shack departed from the traditional earnings report format but said the company would return to its usual report in the third quarter. Here the comparable store sales as give in the report: For the period-ending April 22 sales declined 74%. For the period-ending May 20 sales declined 42%. For the period-ending June 24 sales were down 42%. And for the period-ending July1 sales declined 39%.
For same store sales of other chains, please click here for the latest Green Sheet.