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

Potential Stimulus Package Could Assist Many Restaurants

A stimulus package emerges that will hopefully assist a lot of restaurants. The Food Institute finds some surprising facts in Yelp data. The survival of restaurants may depend on their landlord. McDonald’s is one of the top 10 most valuable brands in the world. These stories and whole lot more This Week in Foodservice.

Restaurant-Related Developments

The status of a stimulus package: There appears to be widespread agreement in Washington, D.C. to support a major economic stimulus program. The disagreement begins when it comes time to determine how much to spend and where to spend it, with the administration, the House of Representatives and the Senate remaining far apart. The various parties do seem to agree on one thing: without some hefty programs, soon the already damaged economy will get even worse. Where this leaves restaurants is uncertain, though there seems to some recognition of the need to support industries that were especially crippled by the pandemic and the resulting restrictions. Timing will play a major role. As of Monday, October 26, it seems highly unlikely that Congress will take any action before the election and given the atmosphere in our nation’s capital, it could be January before any meaningful action is taken. For many operations, the money will be too late.

Some surprising number from Yelp: The online review platform reports a return to normal for restaurant openings after a large decline in April. Between May and July, the average monthly increase in openings hit 29%. In August and September new openings were pretty much flat with 6,600 new restaurants opening each month. Just 100 fewer restaurants opened in September this year than was the case in September of 2019. Yelp noted that there was an increase in open air foodservice operations such as food trucks. Many of the reopened restaurants are “pandemic friendly,” meaning they feature large patios, spaced out tables and order ahead menus. The re-opened locations focused more on takeout and delivery. Yelp observed huge increases in review words such as contactless, curbside, takeout, pickup and delivery. In effect the restaurants that opened were not the same as the ones that closed.

Economic News This Week

  • Initial-jobless claims totaled 787,000, a decline of 55,000 for the week ending October 17. The 4-week moving average totaled 811,250, a decline of 21,500. While the number of initial claims moved in the right direction last week, the fact remains three quarters of a million Americans lost their jobs.
  • Privately owned housing starts increased 1.9% in September over August, per the Census Bureau. This represents an 11.1% increase compared to September 2019. September single-family housing starts were up 8.5% over August. Privately owned housing building permits increased 5.2% in September compared to August and up 8.1% compared to September 2019. The number of permits issued for single family homes were up 7.8% compared to August.
  • Existing home sales skyrocketed in September. The National Association of Realtors reported September sales increased 9.4% over August sales and 21% over September, 2019.
  • The Conference Board’s Leading Economic Index for the U.S. increased in September. The index hit 107.2, a 0.7-point increase. This comes after an August decline of 1.4 points. Despite the modest September improvement, the Conference Board believes the U.S. economy may be losing momentum heading into the final quarter of the year. Further, downside risks may be increasing with more new cases of COVID-19 and weakness in the labor market.

Foodservice News This Week

  • Is Dunkin’ for sale? Can faring well in a pandemic make a restaurant chain a takeover target? That appears to be the case with Dunkin’ Brands, which has the attention of Inspire Brands, which also owns such restaurant chains as Arby’s and Jimmy John’s. Dunkin’s investment in digital prior to the pandemic positioned its operators to weather the storm that is COVID-19. Changes in consumer habit due to coronavirus led to more customers visiting Dunkin’ later in the day and drove an increase in premium product sales. The offer stands at nearly $9 billion, per a N.Y. Times article.
  • Whether a restaurant survives the pandemic may depend on its landlord, according to a Chicago Tribune story. When it comes to working with restaurant tenants, some landlords can be more flexible than others. Much of this depends on the landlords’ financial situations. Some landlords will work out delayed payment programs while others won’t even talk to the operators. The article predicts some landlords will file for bankruptcy in the coming months.
  • McDonald’s remains one of the top 10 most valuable brands in the world, according an Interbrand ranking. Apple was the most valuable brand, as it has been for the last eight years.
  • COVID-19 claims another victim as Wisconsin Apple filed for bankruptcy protection. Louisiana Apple, operating as Wisconsin Apple, acquired the Applebee’s restaurants from Wisconsin Hospitality Group last year. The service grades for the operations improved but the pandemic forced the restaurants to close in March. The Wisconsin Supreme Court ordered them reopened but since reopening the restaurants are earning 30% of what they did between November 2019 and March of this year.
  • On the topic of bankruptcy, a Food Institute story said it may be a matter of valuation. Until the uncertainty resulting from the pandemic goes away the article says, valuation will remain a problem. Some restaurant operators are turning to technology to turn things around. The advances include virtual kitchens, robots, better illness screening, automated ordering and delivery and advanced menus.
  • While the Federal Government continues to debate developing an economic stimulus package that can help restaurants, the mayor of Cincinnati has a stimulus plan for locally owned restaurants. The program is a $4 million grant developed in collaboration between the city and the regional chamber of commerce. Full-serve restaurants, in this case those who offer dinner, are eligible for a grant up to $10,000. Limited service restaurants, those who offer breakfast and lunch, can receive up to $5,000. Operators can use the money for just about anything including wages, protective gear or space heaters.
  • Growth Chains: P.F. Chang’s opened its first P.F. Chang’s To Go unit in New York City and plans to add two in the city. &pizza opened is first unit in New Jersey and has two more planned for the Garden State. Walk ons Sports Bar plans to open 20 to 25 restaurants next year and probably the same in 2022.
  • Comparable Store Sales Reports: Chipotle Mexican Grill up 8.3% and Del Taco (System up 4.1%, company-owned units up 2.20% and franchised locations up 6.5%.)

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