Restaurants get creative to reassure customers and keep them safe. Gift Card sales at Christmas can significantly affect a restaurant chain’s annual financial performance. Ghost kitchens continue to expand. These stories and a whole lot more This Week in Foodservice.

Some restaurants are getting quite creative as they deal with COVID-19.

The City Winery Restaurant in New York City requires diners to take a rapid COVID test before a being seated. A certified practitioner administers the shallow nasal swab test, which costs $50 and provides results in 15 minutes. Patrons receive a glass of champaign while they await results. Customers also must complete a questionnaire and a temperature check.

If the test is negative, the customers will may enter the restaurant but still must abide by the standard protocols. Tables are eight feet apart and customers must wear masks when they are not eating or drinking.

Michael Dorf, founder and CEO of City Winery, has every employee tested daily which he admits is very expensive and beyond the means of many restaurants, but he feels the program will pay off as it reassures his customers every step is being taken to keep them safe.

Economic News This Week

• Initial-jobless claims declined by 75,000 for a total of 712,000 in the week ending November 28. The 4-week moving average dropped by 11,250 for a total of 739,250. While the decline is significant, it remains discouraging to see new claims to continue to come in at more than 700,000 week after week.
• Nonfarm payroll employment increased by 245,000 in November, per the U.S. Bureau of Labor Statistics. Total private employment rose by 344,000 but government employment declined by 99,000.
• The November unemployment rate fell to 6.7% from 6.9% in October. The November rate is down by 8.0% from its recent high in April but remains 3.2% higher than February. The foodservice and drinking place sector reported a loss of 17,400 jobs for November.
• The U.S. added 307,000 jobs in November, per the ADP National Employment Report. Small businesses, those with less than 50 employees, had 110,000 new hires. Medium-sized businesses, those with 50 to 499 employees, added 139,000 new workers. Large businesses, those with 500 or more employees, hired 58,000 people. ADP also reported the leisure and hospitality sector added 95,000 employees.
• The Institute for Supply Management’s November Manufacturing Survey totaled 57.5, a 1.8-point decline. (Any reding greater than 50 indicates increasing activity.) This represents a 1.8-point dip from October, which means manufacturing increased in November but at a slightly lower rate than the previous month. The New Orders Index totaled 65.1, a 2.8-point decline. The Production Index totaled 60.8, a 2.2-point decline. The Backlog of Orders Index hit 56.9, a 1.2-point increase. In contrast, the Employment Index fell into negative territory dropping by 4.8 points from October for November total of 48.4. Of the 18 manufacturing industries surveyed, 16 reported growth for the month.
• The Chicago PMI shows improving business conditions in the region but at a slower pace. The November reading of 58.2 represents a 2.9-point decline from October.
• The Institute for Supply Management’s Services Report found business activity grew for the sixth consecutive month. That’s the good news. The bad news: the growth rate slowed with the index posting a 0.7-point decline for a reading of 55.9. (Any reading greater than 50 indicates in increasing activity.) The Business Activity/Production Index posted a 3.2-point decline for a reading of 58.0. The New Orders Index declined by 1.6 points to a level of 57.2. The Backlog of Orders Index posted a 3.7-point decline for a reading of 50.7. The Employment Index hit 51.5, a 1.4-point increase. Of the 18 non-manufacturing industries surveyed, 14 reported growing in November including in accommodations and foodservices.
• Estimated private construction spending in October increased 1.4% compared to September 2020. It’s also up 3.7% From October 2019.
• New orders for manufactured goods increased 1.0% In October, per the U.S. Census Bureau. This marks the 76th consecutive month orders were up. Shipments also rose 1.0% for the month while unfilled factory orders fell 0.2%.

Foodservice News This Week

• Sharp disagreements appear to remain among congressional leaders regarding the size of an economic stimulus package. Some favor a $900 billion proposal while another group seeks a program in the range of $500 billion. As for timing, it has been suggested that a vote on the measure be postponed until December 18 to work out the differences.
• Holiday gift cards can provide a significant amount of first quarter restaurant sales, per a Wall Street Journal article. Examples are from 2019 when gift card sales accounted for 14% of Outback’s sales and 9% of Cheesecake Factory’s sales. Thus, gift card sales can make or break a restaurant chain’s fiscal year. The article’s author stated the coming year could be good one for the restaurant industry citing the potentially successful rollout of COVID-19 vaccines, less competition from fewer independent restaurants that closed due to the pandemic and possible near to normal levels of gift card use as key factors.
• Everyone seems to be getting into the act when it comes to ghost kitchens. Media company Thrillist is working with N.Y.-based ghost kitchen company Zuul. The Thrillist ghost kitchen will host a rotating group of 10 restaurants which will have a 2-week residency offering limited edition meals for delivery only.
• Ride share-service Lyft is exploring food delivery. Lyft appears reluctant to launch a full-fledged food delivery system and may ease its way into the business by under cutting the prices Uber, GrubHub and others charge restaurants for meal delivery.
• Food-delivery company DoorDash expects to raise $3.14 billion from its U.S. initial public offering. The company plans to sell 33 million shares at between $90 and $95 per share.
• Uber completed its purchase of Postmates. Uber Eats and Postmates will operate as separate businesses. The value of the all stock deal was put at $2.65 billion.
• Sun Capital Partners, which is in the process of selling Friendly’s, has owned 13 restaurant chains in the past 15 years. After it completes the sale of Friendly’s, Sun Capital will have just one restaurant holding, Smokey Bones, and that chain will be sold, too. While some of its purchases were successful, Sun Capital’s CEO said the company learned over the years that the underlying industry must be growing and healthy for its investment to be profitable. Sun Capital plans to focus on acquiring healthcare and technology firms.
• YUM!’s closed on its purchase of Habit Burger in March as the world began to change dramatically due to COVID-19. Despite all the twists and turns over the past nine months, YUM’s CEO is quite glad the company went through with the deal as Habit has proven quite flexible in adapting to a takeout and delivery business. Habit has largely recovered with same store sales down just 3.0% in the third quarter.
• 7-11 franchisees warn of “crushing labor costs” as the minimum wage increases in 25 states. The 7-11 franchisee association contends the franchise agreement requires as much as 59 cents of every gross profit dollar must be paid to the franchisor which makes it impossible to simply raise prices to offset wage increases. The franchisees say that 7-11 refuses to renegotiate the franchise agreement.
• Growth Chains: International fast-food restaurant chain Jollibee plans to add 28 restaurants next year, including 19 in the U.S. and 9 in Canada. Qdoba has signed a deal with a franchisee for 10 units in San Jose and 5 locations in San Diego. Smoothie King nearly doubled its presence in the Chicago market by adding 8 locations in 2020 and it has 20 stores in the chain’s 2021 pipeline.
• Comparable Store Sales Reports: Cracker Barrel down 16.4%, Freshii down 14.2% and Jack in The Box (systemwide up12.2%, company-owned units up 9.6% and franchised stores 12.4%.)

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