Some foodservice industry heavyweights back Foxtrot’s expansion. Bloomin’ Brands virtual chicken concept flies the coop en route to national expansion. A major Jack in the Box franchisee has declared bankruptcy. These stories and a whole lot more This Week in Foodservice.

January total retail sales increased 5.3% compared to December. The growth period broke the streak of three months of sales declines. January sales were up 7.4% compared to January 2020. Total retail sales from November to December were revised to down 1.4%, a decline that was .3% greater than originally reported.

Foodservice & Drinking Place sales increased 6.9% in January from December. Despite this increase, sales were down 16.6% from January of 2020.

Some economists and others see the January sales results as an important sign the economy is improving. Further encouragement comes from the stimulus funds that may soon come from the federal government.

Economic News This Week

• Initial-jobless claims increased 13,000 for a total of 861,000 for the week ending Feb. 13. Ohio reported 147,000 claims for the week ending Feb. 13, an unusually high number. Ohio officials suspect at least 33,000 claims are fraudulent and are investigating. Further complicating matters, the U.S. Department of Labor revised the Feb. 6 report by adding 55,000 more unemployment claims. The severe winter weather that affected most of the country may have an impact on the claims numbers, too.
• Increasing the minimum wage has positives and negatives, according to the Congressional Budget Office. Research predicts an increase will lift some workers out of poverty, but it will likely eliminate some jobs.
• The Producer Price Index for Final Demand increased 1.3% in January. A 5.1% rise in energy prices drove the increase. Without food and energy, January’s increase was 0.8%.
• Business conditions improved in New York during the month of February, according to the New York Federal Reserve’s Empire Manufacturing Survey. The General Business Conditions Index hit 12.1 in February, an 8.6-point increase from the previous month. Any reading greater than 0 indicates growth. The New Orders Index hit 10.8 in February, a 4.2-point increase. Despite a 3.3-point decline, the shipments remained in positive territory at 4.0. The Unfilled Orders Index climbed to 2.6 in February from -5.5 in January.
• The Philadelphia Federal Reserve’s Manufacturing Business Outlook Survey showed continuing growth in the region. The diffusion indexes represent the percentage of respondents indicating an increase minus the percentage of respondents indicating a decrease. Thus, a score can be as high as 100 if everyone surveyed reports an indicator is increasing to -100 if everyone surveyed says an indicator is declining. For February 2021, the study shows General Business Activity at 23.1. The New Orders Index is 23.4. Shipments are at a level of 21.5. The Unfilled Orders Index is 25.6.The Number Of Employees Index is 25.3 and the Average Employee Work Week Index is 30.6.
• Industrial production increased 0.9% in January, per the Federal Reserve. Manufacturing output rose 1.0%. Mining production increased 2.3%. Utilities’ output declined 1.2%. Capacity Utilization for the industrial sector totaled 75.6% in January. Despite the 0.7% increase, utilization remains 4.0% less than its long-run (1972-2020) average.
• January privately owned housing starts fell 6.0% from December and dropped 2.3% from January 2020. Single-family housing starts were down 12.2% from December. Building permits for privately owned housing starts increased 10.4% from December and were up 22.5% from January 2020. Single-family permits were up 3.8% from December.
• Existing-home sales increased to a seasonally adjusted annual rate of 6.69 million in January. This was a 0.6% increase from December and a 23.7% increase from January 2020.

Foodservice News This Week

• Self-described corner store and cafe concept Foxtrot Market received a $42 million growth investment from a cadre of investors that includes some high-profile names in the restaurant industry. Investors include David Barber's Almanac Insights and Monogram Capital Partners as well as food and hospitality industry heavyweights David Chang, founder of Momofuku; Nicolas Jammet, co-founder and chief concept officer of sweetgreen and Walter Robb, former CEO of Whole Foods. With this investment, Foxtrot expects to double its store count by the end of 2021. This growth will include adding as many as nine stores in Chicagoand, in Dallas where the company already has a footprint, and expansion into new markets including Washington, D.C.
• The pandemic may be leading to a glut of used foodservice equipment in some markets, per a report from the Associated Press. Some used equipment dealers report turning away restaurants trying to sell their equipment because the dealers don’t have room in their warehouses. If there is a silver lining to this, operators who are opening new restaurants or who need to replace equipment can get some great deals.
• Where did consumers spend those bucks that used to go to restaurants? According to the Wall Street Journal, spending on cars, appliances, furniture and power tools has shot up. Some manufacturers serving these segments had forecast a decline in sales and were surprised by the increase in orders.
• Tender Shack, Bloomin’ Brands virtual chicken concept, is now on a national flight plan. The multiconcept operator expects Tender Shack to hit $75 million in annual sales soon.
• A 70-unit Jack in the Box franchisee has filed for bankruptcy. The franchisee, which operates under the names Missouri Jack and Illinois Jack, was unable to reach an agreement with its lender, National City Bank, to whom it owes more than $15 million. The franchisee blamed its problems on an increase in a growing number of competitors, which caused the restaurant chain to fall behind in its payments. The COVID-19 pandemic further added to the company’s financial woes.
• In their attempt to build brand awareness, some quick-service restaurants want to sell you more than a meal. McDonald’s, for example, developed a hoodie to coincide with the launch of its latest chicken sandwich. Dunkin’ has what it describes as a wedding kit of matrimonial-related items. All of this is the name of marketing as these companies look for new ways to keep their concepts top of mind among consumers.
• The complex and evolving relationship between restaurants and third-party delivery companies continues to take some new twists and turns. In theory, restaurants should be partners with DoorDash, Uber Eats and other third-party delivery services. In reality, though, operators continue to claim these services are too expensive, even if these companies bring more business to the restaurants. In some markets, though, governments limit how much the third-party delivery companies can charge the restaurants. Some companies claim these fees result in their not being profitable. Enter some new delivery services that charge lower prices by allowing the restaurants to handle some of their own deliveries and charging as little as a $1.00. Whether these new firms will survive is open to question.
• Growth Chains: Mountain Mike's Pizza plans to open 30 locations in Utah in the next decade.
• Comparable Store Sales Reports: Blomin’ Brands: (Combined brands down 17.7%, Outback down 15.2%, Carrabba’s down 11.4%, Bonefish Grill down 27.1% and Fleming’s down 29.7%) and Cheesecake Factory down 19.5%.

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