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

Tallying the Pandemic’s Impact on Foodservice

J. Alexander’s recovers faster than forecast. The famous Commander’s Palace reopens. Wall Street prefer fast feeders over full-serve operators. These stories and a whole lot more This Week in Food Service.

 With the entire country now having dealt with the pandemic for more than six months, here’s what we know:

  • More than 19,000 restaurants have closed permanently since March, per data from Yelp!
  • In addition, 90% of bars and restaurants did not make their full rent payments in August, per a New York Times report. About one-third did not pay any rent for the month.
  • Will the federal government save restaurants? The National Restaurant Association began raising the red flag on the industry’s behalf in March by asking the federal government for recovery funds. Since then, the NRA has remained a consistent advocate for the industry, even as other organizations such as Independent Restaurant Coalition, have entered the fray. Hopefully, congress will take action soon.
  • It seems that some people are treating the impact of the pandemic as a problem of the foodservice industry. If the government gives operators money to pay their help and their rent and doesn’t make the required safety measures too onerous, most restauranteurs will be OK. It is sort of a “If you reopen it, they will come” approach. But it is more complicated than that. The restaurant patrons must not only feel it is safe but be financially confident as well. Here are a couple of employment statistics courtesy of the Wall Street Journal. Unemployment among architects and engineers in August was 3.7% compared to 0.8% in August 2019. In the same period, unemployment for computer and math occupations more than tripled to 4.6%. And postings for jobs with salaries greater than $100,000 declined by 19% in August from April. It is generally recognized that higher income consumers spend more on eating out, so this does not bode well for operators who are open.

 

Economic News This Week

Foodservice News This Week

  • “The worst of the storm has passed.” So says the leadership at Alexanders. The sale of the chain fell apart earlier this year as same store sales plunged 81% in April and 61.5% in May. Comps at the company’s other brand, Stony River, declined 78.3% and 72% April and May respectively. But the J. Alexanders has bounced back faster than forecasted with sales now hitting 90% of the previous year’s totals. The company attributes the fast turnaround to the return of loyal customers and its ability to handle off-premises business when the dining rooms were closed.
  • One of America’s best-known restaurants is back open. The iconic Commander’s Palace survived a 13-month closure due to Hurricane Katrina in 2005. Then the pandemic closed the restaurant for six months earlier this year. And, after opening for just three days, Commander’s Palace was forced to close a second time this year due to yet another hurricane. The restaurant is back now and the current owners, cousins Lally Brenan and Ti Adelaide Martin, continue the Brenan family tradition.
  • Looking ahead to the winter months, stock market analysts believe fast-food restaurants are better positioned than casual dining operators because consumers see the former as being more convenient. Plus, the QSR segment is known for its lower menu prices. Some fast-food chains continue to take convenience to another level by developing contactless payment options. These systems offer customers a higher level of safety as well.
  • At least one operator has survived the pandemic with a ploy most never considered. Amrit Narula opened Mr. Cheesesteak restaurant in Durham, N.C., in the middle of the pandemic and quickly learned he was in trouble. His solution: buying a food truck and hitting the road. Narula was able to build up a roster of regular diners who send their orders in ahead, so their meal is ready when they arrive.
  • McDonald’s is believed to be ready to test a loyalty program. The hamburger giant has had a loyalty program for coffee customers but the new initiative would include at least some food items.
  • The Melting Pot is developing a flex casual concept. Called Melting Pot Social, this hybrid option will offer menu and service options that go well beyond the fondue chain’s usual menu. The new concept’s menu will include some quick bite items. The location measures approximately 3,500 square feet vs. the typical Melting Pot which occupies 5,500 square feet.
  • F. Chang’s notified the State of Louisiana that up to 75 employees at the chain’s Baton Rouge and Metairie restaurants could face reduced work hours for more than 6 months. P.F. Chang’s said the problem the is result of the coronavirus pandemic which had the state close restaurants dining rooms and limited them to carry out service.
  • Sizzler Steakhouse filed for bankruptcy. The 60-year-old chain’s action applies only to its 14 corporate units and does not include the 90+ franchised restaurants. Sizzler’s plan is to renegotiate leases and emerge from bankruptcy in about 90 days. (Note that Sizzler has no connection with the Western Sizzler chain.) This serves as yet another example of how the pandemic continues to decimate casual dining restaurants.
  • Cracker Barrel plans to sell beer and wine in 600 of its 660 locations by the end of 2021. This reverses the chain’s long held policy of not selling alcoholic beverages. The company’s press release did not provide an explanation for the change.
  • In March 7-Eleven announced its intent to hire 20,000 store employees. Instead 7-11 hired 50,000 people. Further, c-store chain intends to recruit 20,000 additional workers to handle increased demand for its products via the company’s app.
  • Growth Chains: Chipotle Mexican Grill opened restaurants in Washington Township and Sommers Point, N.J., and plans to open four more in the Garden State. Jamba inked a deal to open 50 restaurants in Japan. The Big Whiskey American Restaurant & Bar opened three locations during the pandemic, has two more under construction, several on pause. The chain’s goal is to add three to six units a year in the next five years. Pollo Campero has just 77 units in the U.S. now but the chain’s management believes the company can have 300 by 2025.
  • Comparable Store Sales Reports: Darden (Blended down 29.1%, Longhorn down 18.1%, Olive Garden down 28.2%, Fine Dining down 39.1% and Other Business down 39.0%.) It has been Darden’s practice for at least a decade to report the comp store sales for each brand. For the last quarter, though, the company has provided only the data for Olive Garden and Longhorn Steakhouse. Restaurant concepts grouped together either as Fine Dining or Other Business are Bahama Breeze, Capital Grille, Cheddar’s Scratch Kitchen, Edie V’s, Seasons 52 and Yard House. Attempts to contact someone at Darden’s for an explanation were unsuccessful. It should be noted that comparable store sales are not a GAAP number and thus are not required to be reported.

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

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