The stimulus package is here – all 5,000 pages of it. Could Texas Roadhouse have 1,000 restaurants someday? Wendy’s and the Flynn Restaurant reach an agreement on the nearly 400 Wendy’s units previously owned by the now bankrupt NPC. These stories and a whole lot more This Week in Foodservice.

While the long awaited stimulus bill is finally law, it does not contain the direct aid that a lot of foodservice operators thought was absolutely necessary for the industry to survive. The bill does, however, include some programs that should assist the industry’s recovery. It would be nice to provide a quick look at the bill, but it runs more than 5,500 pages.

Economic News This Week

• The U.S. lost 140,000 jobs in December, although the unemployment rate remained unchanged at 6.7%.
• The restaurant industry’s situation is even darker due to the fact it saw employment decline by 372,000 jobs. While not as disastrous as the 5.4 million jobs lost in April of 2020, this still represents a significant decline. Several factors fueled the decline, including lockdowns in some states, colder weather limiting outdoor dining and some operators no longer being able to meet their bills.
• Initial jobless claims declined 3,000 for a total of 787,000 for the week-ending January 2, per the Department of Labor. The 4-week moving average fell by 18,750 for a total of 818,750. The number of initial claims does not appear to be increasing and has settled into a range of around 800,000 a week. Unfortunately, this still represents a historical high.
• November new factory orders rose 1.0%, per the U.S. Census Bureau’s full report for the month. This marks the seventh consecutive month new orders have increased.
• The manufacturing economy continued to recover as Institute For Supply Management’s Production Manufacturing Survey reported its seventh consecutive month of growth in December. The Index rose to 60.7 in December from 57.5 in November. (Any reading greater than 50 indicates growth.) The Production Index increased 4.0 points to 64.8. The New Orders Index rose 2.8 points for a reading of 67.9. The Order Backlog Index was up 2.2 points for a reading of 59.1. The Employment Index increased 3.1 points for a reading of 51.5. Of the study’s 18 manufacturing industries, 16 reported growth for the month. Assuming December is not an aberition, this report is highly encouraging regarding the US economy.
• The service sector grew for the seventh month in a row, per the Institute for Supply Management. The ISM’s Service Index hit 57.2, a 1.3-point increase. The Employment Index, though, fell 3.3 points and the Backlog of Orders Index fell 2.0 points.
• Private construction spending increased 1.2% in November over October on seasonally adjusted annual basis, per the U.S. Census Bureau. Residential construction spending was at a seasonally adjusted annual basis in November that was up 2.7% compared to October.

Foodservice News This Week

• Could Texas Roadhouse reach 1,000 units? The casual dining chain has discovered it can successfully operate in smaller markets, meaning those areas with populations around 40,000 to 60.000 people. Most chains want larger markets. Texas Roadhouse found its competition in less dense towns mainly comes from independent restaurants. Also, while unfortunate but it is true some of the independents will not survive the pandemic. The chain also discovered some customers will drive longer distances, say 10 to 15 miles, to reach smaller market units.
• Wendy’s and the Flynn Restaurant Group reached an agreement regarding the nearly 400 Wendy’s restaurants previously owned by the now bankrupt NPC. Flynn will get about half of NPC’s Wendy’s units and the burger chain’s franchisees will take over the remaining restaurants.
• The Black Angus Steakhouse has temporarily closed more than half of its restaurants, including most of the chain’s California locations. The chain gave no indication when it might reopen.
• Prior to the pandemic, only 30 of Huddle House’s 340 Units had online ordering integrated into their operations. Now 92% of the chain’s open locations offer takeout, delivery and curbside service. Even with more dining rooms open, 20% of sales continue to come from off-premises business. The company’s management believes its off-premises business will continue to grow and has developed two prototypes with more off-premises capabilities. Features of the new prototypes include different configurations with a variety of pickup window options that can vary depending on the site’s characteristics. The new designs also offer staging for third-party delivery drivers, curbside pickup areas and redesigned production with heated and chilled pass-through area and new equipment like induction burners.
• Another Broken Egg did not crack during the pandemic. Prior to COVID-19, the breakfast and lunch chain had never focused on off-premises business and as a result it was less than 2.0% of its sales. A quick pivot aided by their new CEO’s past relationship with third party delivery firms – DoorDash and Uber Eats – and with online ordering platform Olo, has pushed same store sales into positive territory since September. Aiding growth is the company’s offering of beverage alcohol drinks which is just about unique among its competitors.
• The Mayor of Washington, D.C. designated restaurant employees as “essential workers.” As such restaurant workers In Washington, D.C. are eligible to receive the COVID-19 vaccination as early as Feb. 1. Given the hard time that most restaurants have suffered because of the pandemic, prioritizing employees from this sector to receive the vaccine seems only fair.
• A California law will remove thousands of restaurants from food delivery apps. The food delivery companies must now have the restaurants’ permission to list these businesses on their apps. The basic problem was the restaurants lost control. The delivery company would accept orders for menu items that did not travel well or might not be available. Further, for problems like cold food, late deliveries or rude drivers frequently were blamed on the restaurant.
• Applebee’s opened a location with a drive-thru window. An Applebee’s executive stated the Texarkana location is a test and the company will evaluate the results from this unit before making any decisions.
• Growth Chains: Fatburger will open 2 locations in Paris in the next 18 months.
• Comparable Store Sales Reports: Red Robin down 28.9%.

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