Restaurants need government assistance now. Papa John’s grows its business by adding new customers not selling more food to existing ones. A Stanford study that refers to restaurants as COVID-19 “superspreaders” is highly flawed, according to the National Restaurant Association. These stories and more This Week in Foodservice.

As the number of COVID-19 cases continues to climb across the country, leaders at the state and local level continue to curb on-premises dining in various ways, placing continued strain on the restaurant industry. Unfortunately, at present there does not seem to be any activity with respect to a stimulus package and we don’t know what or when restaurants can expect any government assistance.

Economist Jason Furman nailed the problem in a Nov. 12 op-ed piece in the Wall Street Journal entitled “The Economy Can’t Wait Until January.” Furman, who a professor at Harvard and served as chairman of the White House Council of Economic Advisers from 2013 to 2017, makes a strong case that stimulus is necessary right now because the U.S. is down 10 million jobs since February. In other words, the economy is much weaker than it was when the pandemic began. State and local governments were in much better shape financially, too. Furman says stimulus money is necessary to control the virus and he contends that every day that passes without funding is costly in lives and jobs.

Economic News This Week

• Initial jobless claims totaled 709,000, a decline of 48,000 for the week ending November 7. The 4-week moving average totaled 655,250, a decline of 33,250. The slow downward trend, while positive, still indicates thousands of people continue lose their jobs every week.
• Consumer credit increased 4.7% in September, per the Federal Reserve Board. Revolving credit, mostly credit card debt, rose 4.8% after declining for most of this year. Non-revolving credit (auto loans, student loans, etc.) increased at annual rate of 4.6%.
• The October Producer Price Index for Final Demand advanced 0.3%. In the 12-month period ending in October final demand was up 0.5%. Without the volatile food and energy sectors, final demand was unchanged from September to October.
• The October Consumer Price Index for All Items was unchanged from September. Without food and energy prices the index also remained unchanged. In the last 12 months the index rose 1.2%.
• The University of Michigan’s Survey of Consumer Sentiment dropped to 77.0 in November from 81.1 in October, according to preliminary data. The Current Economic Condition Index was virtually unchanged coming in at 85.8 in November, a 0.1 difference from October. The Index of Consumer Expectations fell to 71.3 in November from 79.2 in October. A spokesman for the university said it does not look for much improvement in consumer sentiment until a coronavirus vaccine is approved and distributed.

Foodservice News This Week

• Consumer prices for food rose 0.2% in October. Food-at-home prices were up 0.1% for the month while prices for food away from home were up 0.3%. In the past 12 months prices for food at home were up 4.0% and the prices for food away from home were up 3.9%.
• Papa John’s added 8 million new customers this year. This is the key to growth, according to the chain’s CEO. He says selling more to existing customers “…could lead them to getting worn out of pizza.”
• The National Restaurant Association found flaws in a Stanford University study that refers to restaurants as “superspreaders” of COVID-19. The NRA said the use of modeling rather than actual contact tracing and public health data is not an acceptable way to determine where someone was infected.
• Sysco has eliminated delivery minimums to help the broadline distributor’s customers cope with virus-related difficulties. The offer applies to operators of any size but is specifically aimed at smaller customers. The Sysco CEO also said the company has yet to see the huge number of restaurants in bankruptcy that some had predicted at the start of the pandemic.
• New York Governor Andrew Cuomo ordered restaurants, bars and gyms to close at 10:00 p.m. The governor said this order, which also limits private parties to 10 people, is in response to spiking cases of the coronavirus.
• Here are some interesting steps one upscale restaurant took to slow the spread of COVID19 while serving guests that chose to dine on premises. Steak 48 in Philadelphia, kept all of its tables in place but to keep guests separated, the restaurant placed 2 foot by 2 foot floral arrangements at each table it will keep vacant. Customers must wear masks while not seated at their table. Employees must wear both masks and face shields at all times.
• Chick-fil-A built a modular restaurant in Roswell, Ga. Building components of the restaurant in a factory allows for tighter quality control than on a jobsite. Modular construction can cut weeks off building time. This type of construction has been used for restaurants but for whatever reason never seems to have caught on.
• Thrive Restaurant Group purchased 22 Applebee’s restaurants in Kansas and 22 in eastern Ohio, West Virginia and eastern Kentucky. As a result of this deal, Thrive now operates 81 Applebee’s locations. Thrive also has developed its own concepts, including 16 Carlos O’Kelly’s restaurants, 34 HomeGrown restaurants, a Peace & Love Pie Shop and a pie truck.
• Casey’s General Stores plans to purchase Buchanan Energy. The deal includes 94 Bucky’s convenience stores, primarily in Illinois and Nebraska; 79 dealer locations, as well as multiple parcels of land for future stores. The all-cash deal is valued at $580 million and will bring Casey’s to 2,300 stores.
• C-store chain Murphy USA’s has identified foodservice as the top priority in growing its business. The company has almost 1,500 stores.
• NPC International petitioned a bankruptcy court to accept an $816 million “stalking horse bid” from the Flynn Restaurant Group. Under the terms of the agreement Flynn would acquire all of NPC’s assets which are essentially 1,300 Pizza Hut and Wendy’s restaurants. One of the country’s largest restaurant franchisees, Flynn operates 1,200 Applebee’s, Arby’s, Panera and Taco Bell restaurants.
• Food delivery firm DoorDash has tripled its revenue to $2.9 Billion and its first quarter profit increased to $23 million. The company attributes its financial performance to customer demand for delivered food as a result of COVID-19. The data was released ad part of DoorDash’s Initial public offering.
• Growth Chains: MOOYAH Burgers, Fries & Shakes inked a deal with AGAPE Management to open 10 locations in Dallas. Agape will also take over the management of two MOOYAH units already in Dallas.
• Comparable Store Sales: Arcos Dorados down 27.2%, Brinker International (Brinker down 7.2%, Chili’s company-owned restaurants down 5.6% and Maggiano’s down 38.6%.) Chuy’s Holdings down 19.8%, El Pollo Loco (systemwide units up 1.8%, company-owned locations up 0.2% and franchised units up 3.0%) and Red Robin down 25.1%.

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