Wendy’s disputes the Flynn Restaurant Groups’ move to buy NPC International. McDonald’s locks horns with some of its franchisees over the elimination of rebates and the cost of technology. These stories and a whole lot more This Week in Foodservice.

An analysis of COVID-19 virus outbreaks in the District of Columbia showed restaurants and bars were a major source of the illness but far from the worst and certainly not the only one. Of the 109 outbreaks of the virus in the District between August 1 and November 26, 15 or 13.8% were attributed to restaurants or bars. The leading source was colleges and universities (27.5%) followed by schools K-12 (17.4%) and childcare/daycare (13.8%).

Of course, there is no basis to assume the District’s data projects to the entire U.S. or any other section of the country. But it may help to put restaurants’ role in all of this into better perspective.

Economic News This Week

• Initial unemployment claims surged by 137,000 to a level of 853,000 for the week ending Dec. 5. This came as a nasty shock with claims having totaled around 725,000 in recent weeks. Perhaps the one positive development that will come from this report is it may get the folks in Washington, D.C. moving on the next stimulus package.
• Consumer borrowing increased by 2.1% in October at an adjusted annual rate. Revolving credit, mostly credit card debt, fell by 6.7.%. Non-revolving credit (car loans, student loans, etc.) rose 4.8%.
• The Producer Price Index for Final Demand rose 0.1% in November. This follows a 0.3% increase in October and a 0.4% increase in September. November’s increase was primarily driven by a 0.4% rise in final demand goods. Final demand services was unchanged from October. Excluding food and energy prices, the price index for final demand goods rose 0.2%. The change for final demand in the last 12 months is up 0.8%. The price for final demand food rose 0.5% in November.
• The Consumer Price Index increased 0.2% in November after being unchanged in October. For the 12 month period ending in November the index is up 1.2%. Excluding food and energy, the CPI was up 0.2% in November and up 1.2% in the last 12 months. November food prices declined 0.1%, with food-at-home prices down 0.3% and food-away-from-home prices up 0.1%. In the 12-months ending in November food prices rose 3.7% with food-at-home prices up 3.6% and food-away-from-home prices up 3.8%.
• Non-farm business sector productivity increased 4.6% in the third quarter, reports the Bureau of Labor Statistics. Unit labor costs in the non-farm business sector fell 6.6% in the third quarter.
• The University of Michigan Index of Consumer Sentiment posted “a surprising increase,” per a university spokesperson. The preliminary December Index rose to 81.4 from 76.9 in November. The Current Economic Conditions Index reading was 91.8, up from 87.0. The Index of Consumer Expectations increased from 70. 5 in November to 74.7.

Foodservice News This Week

• Wendy’s objected to The Flynn Restaurant Group’s proposed purchase of NPC International, one of its larger franchisees. Wendy’s notes Flynn’s is a franchisee of Arby’s and Panera Bread, both considered direct competitors of the burger chain.
• McDonald’s will discontinue a longstanding rebate on Happy Meals and its franchisees are not happy. The roughly 20-cent rebate was intended to offset the cost of the Happy Meal toy. Some Franchisees are threatening to raise Happy Meal prices. Big Mac’s franchisees are also perturbed over having to pay roughly $10,000 per restaurant for updated technology. McDonald’s executives acknowledged they hadn’t properly explained to their franchisees why the fees are necessary.
• Inspire Brands has completed its acquisition of Dunkin’ Brands. As a result of the $11.3 billion deal announced in November, multiconcept operator Inspire Brands has nearly 32,000 restaurants across more than 60 countries generating $26 billion in annual system sales, per a company release.
• Luby’s provided additional information that will impact how it dissolves the company. During the year the company closed 18 Luby’s, 20 Fuddrucker’s and its remaining Cheeseburger in Paradise unit. The company also noted it received a $10 million Paycheck Protection Loan as part of the Coronavirus Aid, Relief, and Economic Security Act. Those funds may have to be repaid, which could limit the amount of cash available for other payments.
• The National Grocers Association is Investing to attract essential workers to its business segment. The multichannel campaign targets employees displaced from other industries including foodservice.
• Food delivery firm DoorDash’s initial public offering raised $3.37 billion on the sale of 33 million shares at $102 each. DoorDash originally set a target of $85 per share but then raised the price to $90 to $95. The Wall Street Journal said with the stock selling for $189.51 a share when the market closed Wednesday, DoorDash had a market value of $71.8 billion. This is more than the combined value of Chipotle Mexican Grill, Domino’s Pizza and Dunkin’ Brands.
• Taco Bell projects 50% of its sales will come from digital channels in the near future. Currently 10% of the chain’s sales come digitally but Taco Bell’s marketing director believes the company’s ability to communicate with customers via its digital channels will drive volume increases.
• The Atlas Wholesale Food Company of Detroit lends its support to restaurants by matching guest spending with an equal amount in product credit. Consumers must taker a photo of their receipt including tax and tip then post it on Facebook. Atlas will then match that amount in the form of credit for the restaurant’s supplies bought from the distributor.
• Growth Chains: Dickey’s Barbecue Pit signed a franchise agreement for Japan with an eventual goal of having a restaurant in every major city in the country. The immediate plan calls for two ghost kitchens in 2021. Starbucks plans to add 22,000 locations in the next 10 years, most of which will be small units having pickup, curb side service or drive thru windows.
• Comparable Store Sales Report. Dave & Buster’s down 66%.

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