This story and more This Week in Foodservice.
Since most foodservice operators rely at least in part on broadliners for their food and other supply items, a look at the major distributors’ financial reports provides a glimpse into industry performance. The following are the most recent quarterly financial reports of the three major foodservice distributors.
- Sysco’s sales for its second fiscal quarter of 2021 totaled $7.9 billion for its U.S. operations, a decline of 23.9% from the same period last year. Local case volume decreased 19.7% for the reporting period.
- The Performance Food Group’s sales for its second fiscal quarter of 2021 totaled $6.8 billion, an increase of 12.8% from the corresponding quarter last year. The increase was primarily attributable to the acquisition of Reinhart Foodservice. Total case volume increased by 8.4%. Total case volume includes Reinhart Foodservice and a 26.5% increase in independent cases. Excluding the impact of the Reinhart acquisition, case volume declined 16.9% and independent cases declined 5.0%.
- US Foods reported sales for its fourth quarter of 2020 totaled $6.1 billion, a decline of 11.5%. Total case volume decreased 10.2% with independent case volume decreasing 6.0%. The acquisitions of Smart Foodservice and the Food Group (Acquired September 13, 2019) and Smart Foodservice (Acquired April 24. 2020) contributed to sales.
Economic News This Week
- Initial jobless claims totaled 712,000, a decline of 42,000 for the week ending March 6. It appears the number of jobless claims and the number of layoffs they represent are finally beginning to trend downwards.
- The Producer Price Index for Final Demand increased 0.5% in February. Final Demand in February without food and energy increased 0.3%. In the last 12 months, Final Demand has increased 2.8%.
- The Consumer Price Index increased 0.4% in February. Without food and energy prices the index rose 0.1%. In the last 12 months, the index has risen 1.7%. In the last 12 months, the index without food and energy prices is up 1.3%.
- The University of Michigan’s Index of Consumer Sentiment reached its highest level in a year. The preliminary March reading of 83.0 is up from 76.8 in February. The Current Economic Conditions Index rose to 91.5 in March from 86.7 in February. The Index of Consumer Expectations was up to 77.5 in March from 70.7 in February. A University spokesperson attributes the increase to the growing number of people being vaccinated and the widely anticipated relief coming from the federal government.
Foodservice News This Week
- Food prices increased 0.2% in February, per the Bureau of Labor Statistics’ Consumer Price Index. In the 12 months ending in February food prices increased 3.6%.
- Cicis emerged from Chapter 11 bankruptcy protection, completing the process in less than two months. The reorganization coincides with the simultaneous acquisition of the company by D&G Investors. The deal was in place when Cicis announced its plans to file for bankruptcy in early February. D&G Investors is a newly formed affiliate of SSCP Management and Gala Capital Partners. Combined, the new ownership group owns and operates more than 200 restaurant locations in their collective portfolios. The sale to D&G Investors includes Cicis Enterprises, JMC Restaurant Distribution, and all its assets and subsidiaries.
- Record-shattering cold, snow and rain greatly hurt restaurant sales in large parts of the country, NPD Group reports. Customer transactions at major chain restaurants declined 13% in February 2021 compared to the same month in 2020. Texas alone saw a decline of 46% in consumer transactions at major chains during the month.
- Red Robin introduced three virtual brands. Chicken Sammy’s offers chicken sandwiches, tenders, salads and wings. The Wing Department has traditional chicken wings as well as Cauliflower wings. The Fresh Set’s menu has wraps, sandwiches, chicken tenders, salads and wings.
- The founders of Ruby Tuesday’s are being sued. Doug Cavanaugh and Ralph Kosmide are accused of pushing the chain into bankruptcy in 2018 to benefit their own financial interests at the expense of the restaurant company.
- For the past year, restaurants battled to survive. Now that restaurants can reopen, new problems are emerging, per a Wall Street Journal Report. Will their customers return? When? How many? Research indicates 53% of Americans are comfortable with eating out while others say they need more time. This makes ordering food and supplies difficult. Staffing, a struggle in good times, is another unpredictable area. While many operators realize they are lucky to still have a business to run they also have to learn a whole new set of rules.
- Growth Chains: The Melting Pot will expand into Alabama, Louisiana, Mississippi, Tennessee and Texas. The chain has 17 restaurants in development.
- Comparable Store Sales Reports: Applebee’s down 16.6%, Arcos Dorados down 7.9%, IHOP down 30.1%, Jack in the Box (systemwide sales up 12.5%, company-owned units up 7.5% and franchised units up 13.0%), Texas Roadhouse (company-owned units down 8.9% and franchised units down 11.2%) and Wendy’s up 5.5%.
For details and same-store sales of other chains, Please Click Here for the latest green sheet.