Why is Smoothie King smiling? Bloomin’ Brands launches a virtual chicken chain. New York City restauranteurs finally have a date to reopen indoor dining. These stories and more are in This Week in Foodservice.
To be realistic, the last six months have been disastrous for the foodservice industry. The number of restaurants closed and the number of people losing their jobs continues to reach astronomical heights.
While the industry overall continues to struggle mightily, some companies are flourishing. Take, for example, Smoothie King. The chain saw sales skyrocket and its CEO believes he knows why. The coronavirus caused consumers to place a greater emphasis on healthy eating and that aligns with Smoothie King’s primary objective. Traffic not only increased at Smoothie King locations but so did order size. As a result, sales shot up 26%.
It also appears everything else the chain did was on target, too, including digital ordering, drive up windows, curbside pickup and a rewards program. Smoothie King also donated $1 million worth of smoothies to hospitals, to testing centers, local hospitals, police and fire stations and other essential work places.
And, Smoothie King continues to open new locations. The chain opened 26 stores in the first half of 2020 and expects to open 80 stores by year end.
Economic News This Week
- Initial jobless claims for the week-ending September 5 totaled 884,000, which is approximately the same as the previous week. This marks the second consecutive week where initial claims were less than 1 million. The 4-week moving average was 970,750 claims, a dip of 21.750.
- Consumer credit decreased at a seasonally adjusted annual rate of 6.75% in the second quarter of 2020, the Federal Reserve reported. Revolving credit, primarily credit card debt, decreased at an annual rate of 31.75%. Nonrevolving credit, auto loans, student loans, etc., increased at an annual rate of 2.75%.
- The Producer Price Index for Final Demand increased 0.3% in August. Final demand services contributed to the increase by growing 0.5%. Prices for final demand goods rose 0.1%. The index for final demand less food, energy and trade services was up 0.3%. For the 12-months ending in August, prices for final demand less food, energy and trade services increased 0.3%.
- The Consumer Price Index increased 0.4% in August on a seasonally adjusted basis. For all items excluding food and energy, the index grew by 0.4%. For the 12-month period ending in August the index was up 1.3%.
Foodservice News This Week
- Consumer prices for food increased 0.1% in August and 1.3% in the 12-month period ending that same month. Food at home prices decreased 0.1% in August and 4.6% for the 12-month period ending that same month. Food away from home prices rose 0.3% in August and 3.5% in the 12-month period ending that same month.
- Bloomin’ Brands introduced a virtual chicken concept. Going to market as Tender Shack, consumers can only order its food for delivery via DoorDash. The menu items will be prepared at Bloomin’s Carrabba’s Italian Grill units. The menu includes tenders, sandwiches, “party tenders,” sauces, fries, drinks and a cookie. Tender Shack closely follows Brinker International’s virtual concept It’s Just Wings.
- New York City restaurants finally have a date to resume indoor dining. New York Governor Mario Cuomo granted New York City dining rooms permission to reopen for on-premises dining starting September 30. Due to government edict aimed at slowing the spread of COVID-19, dining rooms in New York City restaurants have remained closed since mid-March. This welcome news comes with a significant number of restrictions. The dining areas are limited to 25% capacity. There will be no bar service. Masks must be worn unless seated. Temperature checks are mandatory. One member of each party must provide their contact information in the event tracing becomes necessary and all restaurants must close at midnight. The governor also said that November 1 is the deadline to decide when restaurant capacity can be increased to 50%.
- More plan to test multiple drive up widows. Earlier this month Burger King unveiled a new store design developed for today’s world. It includes drive-thru, drive-in and even walk-up service. Now Taco Bell and Shake Shack have unveiled plans to test the multiple drive-thru window concept as well.
- Domino’s was well prepared for the pandemic. No, the pizza giant didn’t know COVID-19 virus was coming but it was pursuing procedures that helped its operators while other foodservice companies struggled. One example was no contact pickup. Customers’ notified the Domino’s store when they arrived and a staff member would come out and place the order in the trunk. Domino’s had committed to digital ordering several years. In 2019, 65% of the chain’s orders were placed digitally. That has increased 10% this year. Another thing Domino’s has going for it is the use of the company’s proprietary POS system and the ability to tap into all the marketing data the systems generate.
- CEC Entertainment received approval for $200 million in financing to help the company navigate bankruptcy and ultimately find a buyer. The parent company of Chuck E. Cheese and Peter Piper Pizza filed for bankruptcy in June when landlords began suing the company for not paying their rent.
- Growth Chains: Chicken Salad Chick plans on opening seven locations in the Raleigh, N.C. area. The Dickey’s Barbecue franchisee in New Orleans will add two units plus a food truck. McDonald’s will open “multiple” units in far eastern Russian cites, adding to the 700 locations already in the county, fast-casual chain Slim Chickens will expand into Maryland, New Jersey and Washington in 2021 with a goal of growing from to 600 units in 10 years. The chain operates 96 units systemwide.
- Comparable Store Sales Reports: Cracker Barrel down 41.7%, Dave & Buster’s down 87.2% and Alexander’s Holdings down 55.3%. Stony River Steakhouse down 56.9%.
For details and same store sales of other chains, Please Click Here for the most recent green sheet.