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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Is the “Great Resignation” next on the labor horizon?

Many restaurants have yet to receive their government grant money. Is the “Great Resignation” next on the labor horizon? McDonald’s will launch its loyalty program next week. Historic heatwaves in the Pacific Northwest impact restaurant operations, too. These stories and a whole lot more This Week in Foodservice.

Restaurants continue to hang on as they wait for federal aid. Some operators that were approved for grants have yet to receive any funds from the government. Of course, none of this should come as a surprise given all the twists and turns that came with this legislation.

First, it took Congress months before it was finally able to pass the Restaurant Revitalization Fund back in March. Then the courts struck down the section of the bill that gave priority to women, veterans, and socioeconomically disadvantaged restaurant owners. The result of this was to delay payments to the applicants who have already been approved, per published reports.

More than 362,000 restaurants applied for more than $75 billion in grants and it’s expected that nearly $50 billion in applications will remain unfunded, according to the National Restaurant Association. The total number of applicants is about 55% of the total number of eating and drinking establishments open in Feb. 2020.

A new bill authorizing an additional $60 billion for grants to restaurants has been introduced in Congress but its future and timing are uncertain.

Economic News This Week

  • Initial jobless claims decreased 7,000 for a total of 411,000 in the week-ending June 19. The less volatile 4-week moving average rose 1,500 claims. For all practical purposes, claims were unchanged.
  • Labor challenges may be just beginning. That is because when employees are called back to the office many may look to quit instead. In what some are referring to as the Great Resignation, 95% of workers are considering changing jobs, per data from Monster.com.
  • Gross domestic product increased 6.4% in the first quarter, per the third estimate from the Bureau of Economic Analysis. This is unchanged from the BEA’s second estimate. Real gross domestic product in the fourth quarter of 2020 increased 4.3%.
  • Personal income decreased 2.0% in May, per the BEA. Disposable personal income declined 3.3%. Personal consumption expenditures were flat in May.
  • In May, sales of existing homes declined to 5.8 million. This marks the fourth consecutive month of declining sales, per the National Association of Realtors. This also represents a 0.9% decline from April. In contrast, existing home sales were up 44.6% compared to May 2020.
  • Sales of new single-family homes totaled 769,000 in May, per data from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. This marks a 5.9% decline from April of this year but a 9.2% increase over May 2020.
  • Consumer sentiment slipped somewhat in June but remains ahead of May, per the University of Michigan’s Index of Consumer Sentiment. The June Index of Consumer Sentiment came in at 85.5, up from 82.9 in May. June’s final reading represents the study’s second highest mark since the start of the pandemic. The Current Economic Conditions Index is down less than one point in June from May. The Index of Consumer Expectations rose to 83.5 in June from 78.8 in May.

Foodservice News This Week

  • What roadblocks does the restaurant industry face on its road to recovery? Well, there are a few to consider, including the multifaceted labor issue and rising costs in a variety of areas. In its latest whitepaper, Technomic takes a more detailed look into these roadblocks that will impact the restaurant industry’s recovery. From Technomic’s perspective, the future of the restaurant industry will include more automation and off-premises-only locations and fewer dining rooms for limited-service restaurants, among other things.
  • The historic heatwave rocking the Pacific Northwest is doing more than forcing people inside: it is forcing restaurants to temporarily cease operations. With mercury rising to 115 degrees F in Portland, Ore., for example, kitchen ventilation systems had trouble keeping up thus creating dangerous conditions for cooks.
  • Starbucks denies shortages of coffee and cups. Responding to published reports saying the Seattle-based coffee giant was running short on key items, Starbucks CEO Kevin Johnson said that was not the case. Johnson did, however, say the company does face some operational challenges that continue to test the resiliency of its supply chain.
  • Renowned restaurateur Danny Meyer invested in a plant-based food company. The company, based in Chile, uses an artificial intelligence platform to sift through huge datasets to find ingredient and processing combinations that would best mimic the flavor, texture, etc. of real meat or dairy in plant-based alternatives.
  • BBQ Holdings has a healthy appetite for acquisitions. The parent company of Famous Dave’s agreed to purchase Village Inn and Baker’s Square for $13.5 million. Both chains just emerged from bankruptcy.
  • McDonald’s loyalty program will go national on July 8. Big Mac is the latest in a series of quick-serve and fast-causal restaurant chains to launch a loyalty program. The rollout comes as the chain recorded nearly $1.5 billion in digital sales during its first fiscal quarter. The chain will use the loyalty program to personalize its service. McD’s crew will greet loyalty program members by name as they move through the drive thru. Following their visit loyalty program members will receive a personal email highlighting upcoming deals.
  • Growth Chains: Bojangles intends to expand from a regional chain into a national operation. The company’s immediate plans call for 15 corporate stores in Dallas. Next on the list is adding locations in Florida, Georgia and Tennessee followed by Ohio, New York and Texas. Looking to expand its North Carolina footprint, Little Caesars set a goal to develop 25 new units across the Charlotte market between now and 2024. Donatos will expand its reach in Nashville via a deal with ghost kitchen operator REEF Kitchens. Fast-casual Indian concept Curry Up Now has inked its first lease in the Austin, Texas, market.
  • Comparable Store Sales Reports: For the fourth quarter of its fiscal year ending May 30, 2021, Darden Restaurants reported a consolidated same-store sales increase of 90.4% compared to the same period in 2020. This marks a .5% decrease compared to the same period in 2019. Looking at the company’s individual brands, Olive Garden was up 61.9% compared to the same period in 2020 and a 1.5% decrease compared to the same period in 2019; LongHorn Steakhouse up 107.5% compared to 2020 and up 13% compared to 2019.

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