This Week In Foodservice

Jerry Stiegler aggregates key industry information and provides brief analysis to help foodservice professionals navigate the data.

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Labor to Remain a key Issue for all Foodservice Segments

The job shortage is not going to get better any time soon.Krispy Kreme is going public again. Virtual brands remain in full bloom. These stories and more This Week in Foodservice.

The Federal Reserve says the shortage of workers may delay the nation’s economic recovery. Some observers think the labor shortage could last for months. Some employers are limiting production and cutting operating hours. Some firms are encouraging their current workies to work overtime. In other words, labor remains a center of the plate issue for all industries, including restaurants.

McDonald’s is frequently cited in stories about the labor shortage. One franchisee is offering i-phones to job applicants. Another is handing out $50 just to entice people to show up for the interview. 

It is common for companies to blame the federal government’s unemployment supplement for labor woes saying that workers can make more staying at home. Along those lines, more than 20 states have now refused the federal unemployment payments. But as a story in the Chicago Tribune points out, citing the federal unemployment supplement as the main reason the workforce is slowly remerging may be over-simplifying things. Workers' reasons for their slow return can vary greatly depending on their family situation, career goals and more. And nowhere is this more evident than in the restaurant industry.

So expect labor to remain a key issue for all segments of the foodservice industry for a while longer.

Economic News This Week

  • Initial jobless claims totaled 385,000, a decline of 20,000 for the week ending May 29, per the U.S. Department of Labor. This is the lowest level since March 14, 2020, when the number of claims totaled 256,000. The 4-week average came in at 428,000, a decrease of 30,500. 
  • Manufacturing activity increased in May, per the Institute for Supply Management.The ISM index gained half a point for a reading of 61.2. Any reading exceeding 50 means expansion. The new orders index hit 67.0, a 2.7-point increase. The production index totaled 58.2, a 4.0-point decline. The order backlog index rose 2.4 points to a level of 70.6. The employment index declined 4.2 points for a reading of 50.9. Of the 18 manufacturing industries surveyed, 16 reported growing in May.
  • The Institute for Supply Management reported activity for services increased for the 12th consecutive month. The Index rose 1.3 points for a reading of 64.0. Any reading greater than 50 indicates growth. All 18 segments showed growth.
  • April construction spending increased 0.2% compared to March, per the U.S. Census Bureau. This year’s construction spending is 9.8% greater than April 2020.

Foodservice News This Week

  • Actor and comedian George Lopez plans to take his taqueria concept on the road. In a partnership with virtual restaurant concept operator NextbiteLopez’s tacos are available in more than 80 locations nationwide, including in Atlanta, Dallas, Los Angeles, New York City, Miami, San Francisco and Seattle. The menu features street taco combos, family packs, sides, and drinks. Tacos arrive deconstructed, allowing consumers to customize their meals. Customers can order Lopez’s tacos from participating local restaurants via such third-party delivery providers as Uber Eats, Doordash, Postmates and Grubhub. 
  • Grocery stores continue to emphasize the convenience of prepared foods for customers. The latest example comes in the form of Dom’s, which just opened in Chicago’s Lincoln Park neighborhood. Dom’s features 12 show kitchens, including options for coffee and sandwiches, as well as a plant butchering station. This is the brainchild of Bob Mariano, who developed a somewhat similar concept in the Chicago area known as Mariano’s.  
  • Broadline distributor Sysco reached an agreement to purchase Greco & SonsFounded in 1990, Greco Imports and distributes specialty meat products. The company has about $800 million in annual revenue. Sysco said That Greco & Sons will operate as a standalone company, which is how the broadliner usually approaches things when acquiring a company.
  • Comparable Store Sales Reports: Freshii down 18.5%.

For details and same-store sales of other chains, please click here for the latest Green Sheet. 

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