Total U.S. retail sales fell in December, including, unfortunately, foodservice and drinking places. Darden’s pandemic era plan relies on curbside service. More than half of Chipotle’s sales come from digital means and the chain is making major changes to its business. Almost 60% of C-stores saw in store sales increase last year but the number of C-stores declined for the third consecutive year. These stories and a whole lot more This Week in Foodservice.
December total retail sales declined 0.7% from November, per the advance report from the U.S. Census Bureau. Compared to December 2019 retail sales rose 2.9%. For all of 2020 retail sales increased 0.6% from 2019. The advance November total retail sales were updated to show a decline of 1.4% from October. This decline is .3% greater than the original projection.
December sales at foodservice and drinking places declined 4.5% decline from November. Compared to December last year, restaurant and bar sales declined 21.2%. Overall, 2020 sales at restaurants and bars declined 19.5% compared to 2019. The Advance November Sales for Foodservice and Drinking Places which were originally reported as down 4.0% were revised to down 3.6.%.
Please bear in mind this data comes with some limitations and cautions. The Census Bureau bases its advance report on a limited sample and it may revise this report with the receipt of a broader sample. The survey covers only restaurants and bars. Not included are hotels, resorts, clubs, employee feeding, schools, colleges, healthcare and military. Finally, some but not all the statistics are adjusted for seasonal variations, holidays, and weekends but none for menu price changes.
Economic News This Week
- Initial jobless claims soared by 181,000 for a total of 965,000 for the week ending Jan. 9. The 4-week moving average totaled 834,250, an increase of 18,250 claims.
- The Producer Price Index increased 0.3% in December, per the Bureau of Labor Statistics. The December increase was the result of a 1.1% rise in prices for final demand goods, according to BLS. The index for final demand services fell 0.1%. In the past 12 months. Final demand is up 0.8% overall. The index for food declined 0.1% in December and is down 0.8% from 12 months ago.
- The Consumer Price Index increased 0.4% in December. Excluding food and energy, the index was up 0.1%. In the 12-month period ending in December, the Consumer Price Index was up 1.4%.
- The Federal Reserve Bank of New York’s Empire State Manufacturing Survey showed little growth in January. The index fell 1.4 points for a reading of 3.5. Any number exceeding zero indicates growth. The New Orders Index totaled 6.6, an increase of 3.2 points. After a 4.8-point decline, the Shipments Index totaled 7.3. The Number of Employees Index totaled 11.2 due to a 3.0-point decline. The Average Employee Work Week grew 1.5 points for a reading of 6.3.
- Industrial production declined 1.6 points in December, per The Federal Reserve Board. Manufacturing production posted a 0.9% increase, mining production 1.6% and production at utilities rose 6.2%. Capacity utilization for the industrial sector increased 1.1% in December for a reading of 74.5%. Despite the increase, the capacity utilization rate is 5.3 percentage points below its long-run (1972-2019) average.
- The preliminary results for the University of Michigan’s January Index of Consumer Sentiment show trivial declines despite an uptick in COVID-19 deaths, the attack on the U.S. Capitol and the subsequent impeachment of President Trump. The index totaled 79.2 in January, a decline of 1.5 points from December. The Current Economic Conditions Index declined to 87.7 from 90.0 in December. The Index of Consumer Expectations dropped to 73.8 from 74.6.
Foodservice News This Week
- Food prices increased 0.4% in December, per the Consumer Price Index. Food at home and food away from home prices both increased by the same 0.4% rate. For the 12 months ending December 2020, food prices rose 3.9%.
- Darden has a plan for the pandemic era. Gene Lee, Darden’s CEO, believes that curbside pickup is faster than drive thru. Olive Garden now has dedicated parking spots on the side of its buildings. Using a side door, staff can access these parking sports without moving food through the lobby. Another advantage of curbside is that it typically requires no extensive remodeling to execute. Lee believes customers can enter the Olive Garden parking lot, get their food and be on their way in less than a minute.
- Chipotle’s online sales skyrocketed in 2020 and now account for more than half of the fast-casual chain’s sales. This led the chain to consider some changes, including more of what it refers to as Chipotlanes. By serving digital orders only, these drive-thru-like lanes reduce lines inside the restaurants and speed up service. Chipotle is also considering adding a breakfast menu. The increase in sales volume has required Chipotle to increase hiring, too. The company held a Jan. 14 hiring event with a goal of hiring con15,000 employees.
- Fifty-nine percent of c-stores reported in-store sales growth in 2020, per a published report in Convenience Store News. And 30% of c-stores participating in the study said their in-store sales decreased. C-store operators adjusted their product mix with 49% adding pre-packaged, ready-to-eat meals; 41% focused on prepared foodservice meals and 24% focused more ready-to-heat-take home meals.
- Despite rising sales, the number of c-stores declined. As of December 2020, the NACS/Nielson Convenience Industry Store Count said there were 150,274 units, which is down from 152,720 stores at the end of 2019.
- Fast-food workers will strike in support of a higher minimum wage. The action is planned for 15 cities and is being organized by the Fight for $15 organization and is backed by the Service Employees International Union.
- Growth Chains: Shake Shack plans to add 35 to 40 units this year.
- Comparable Store Sales Report: Shake Shack down 17.4%.
For details and same store sales of other chains, Please Click Here for the latest Green Sheet.