COVID-19 regulations make a comeback. Foodservice sales rebound while coffee sales could use a jolt. Wendy’s goes to Walmart. These stories and more This Week in Foodservice.

As the number of COVID-19 cases continues to climb across the country, many restaurant operators continue to look for ways to keep staff and guests safe while remaining open. And whether a restaurant takes certain steps to meet local mandates or is simply being proactive depends largely on where it operates.

For example, New York City made headlines a few weeks ago saying it will require vaccinations for restaurant staff and guests who chose to dine indoors. Known as The Key to NYC, these regulations took effect on Aug. 17. Lots of operators in the Big Apple remained concerned about how they were going to enforce these regulations while serving guests and follow other safety protocols, particularly when labor remains a significant challenge.

Just west of New York City, Philadelphia once again requires masks at businesses indoors, citing the surging delta variant and the declining vaccination rate as the main reasons. The edict comes with one caveat: If the business requires proof of vaccination, then masks will be optional for vaccinated people.

While some businesses were in favor of such moves, others were not as thrilled. “Today’s action by Philadelphia mayor Jim Kenney puts an unfair responsibility of enforcing these new requirements on operators and their employees,” said John Longstreet, president, and CEO of the Pennsylvania Restaurant & Lodging Association in a statement. “We have several issues with this action even though we have a shared goal to keep the public and employees safe and businesses open. Once again, the city is implementing a requirement without PRLA’s feedback. Unfortunately, this will lead to confusion and inability to effectively implement, resulting in gaps in enforcement and further resistance from businesses and the public, potentially doing more harm than good. The PRLA supports the goal of a vaccinated and safe work environment for all. However, mitigation efforts should not put business owners and operators in a position to choose between a fully vaccinated staff and customer base, or masks for all. This puts an unfair burden of verification on employees with no time to train or implement protocols. Over this past year, restaurant workers have suffered severe backlash when enforcing those rules. Our national partner, ServSafe, had to go so far as to create a conflict de-escalation training module to support those front-of-house workers dealing with customer pushback.”

To its credit, the PRLA has spearheaded an aggressive vaccination drive this summer with the goal of vaccinating hospitality industry workers and members of the communities in which they work.

And in Texas, the state government issued an executive order that says companies that have received government loans cannot require or ask for proof of vaccination. Despite this edict, restaurants around the state are taking matters into their own hands. This includes a growing list of restaurants in the Texas state capital of Austin that are reverting back to earlier COVID-19 restrictions, including mask requirements, proof of vaccination, a continuation of takeout and more.

This comes as Texas Alcoholic Beverage Commission is reminding restaurant operators that Senate Bill 968, passed during the last regular legislative session, bars them from making customers show proof they've been vaccinated against COVID-19. The TABC has already asked six Texas businesses to stop requiring proof of vaccination or risk having their alcohol permits revoked, per published reports.

This latest surge not only impacts restaurants at the store level. It also affects larger operators’ return to work plans. McDonald’s, for example, pushed its corporate reopening date to Oct. 11 from Sept. 11, per various published reports. In addition, McDonald’s will also require employees working in its corporate offices to be fully vaccinated before they return. The company set a deadline of Sept. 27 for employees to be fully vaccinated. McDonald’s said it made these decisions, in part, due to employee feedback and requests from local governments that asked for the vaccine requirements.

It’s interesting to note, though, McDonald’s vaccine requirements apply only to its corporate headquarters and the guidance does not extend to the store level. This is very similar to the situations at other large employers, such as Amazon and Walmart.

Economic News This Week

• Initial unemployment claims totaled 375,000, a decrease of 12,000 for the week ending Aug. 7, 2021. The 4-week moving average totaled 396,250, an increase of 1,750 from the previous week.
• Retail and foodservice sales for July 2021 were $617.7 billion, down 1.1% from the previous month, but 15.8% greater than July 2020, per the advance report from the U.S. Census Bureau. Total sales for May 2021 through July 2021 period were up 20.6% from the same period a year ago. The May 2021 to June 2021 percent change was revised from 0.6% to 0.7%. Retail trade sales declined 1.5% from June 2021, but up 13.3% from the same period in 2020. Sales at food services and drinking places increased 38.4% from June of 2020.
• The Consumer Price Index increased 0.5% in July, per the S. Bureau of Labor Statistics. This comes after a 0.9% June increase. Over the last 12 months, the all items index increased 5.4%. The indexes for shelter, food, energy, and new vehicles all increased in July and contributed to the monthly all items seasonally adjusted increase. The food index increased 0.7% in July as 5 of the major grocery store food group indexes rose, and the food-away-from-home index increased 0.8%. The index for all items less food and energy rose 0.3% in July after increasing 0.9% in June.
• Labor productivity increased 2.3% in the second quarter of 2021, the U.S. Bureau of Labor Statistics reported. Output increased 7.9% and hours worked increased 5.5% Compared to the second quarter of 2020, nonfarm business sector labor productivity increased 1.9%.
• The Producer Price Index for Final Demand increased 1.0% in July, per the U.S Bureau of Labor Statistics. Final demand prices rose 1.0% in June and 0.8% in May. On an unadjusted basis, the final demand index moved up 7.8% for the 12 months ended in July, the largest advance since 12-month data were first calculated in November 2010. Nearly three-fourths of the July increase in the final demand index can be traced to a 1.1% advance in prices for final demand services. The index for final demand goods rose 0.6%. Prices for the final demand showed less foods, energy, and trade services moved up 0.9% in July, the largest advance since climbing 1.0% in January. For the 12 months ended in July, the index for final demand fewer foods, energy, and trade services rose 6.1%, the largest increase since 12-month data were first calculated in August 2014.

Foodservice News This Week

• In the year ending May 2021, coffee servings ordered at commercial foodservice operations declined by 7% from a year ago, per data from NPD Group. For a pre-pandemic view, coffee servings decreased by 11% from 2 years ago. Visits to coffee houses and gourmet chains declined by 6% in the period compared to a year ago, and 8% from 2 years ago. Specialty coffee servings orders at foodservice outlets overall represent 44% of orders, and regular coffee, 40%. Specialty coffee holds 71% of servings ordered at coffee shops, and regular coffee represents 29% of servings. “Coffee has been a go-to beverage in the U.S. for a very long time, but it has evolved over the last ten years,” says Darren Seifer, food, and beverage industry analyst at The NPD Group. “Today’s consumers are looking to elevate and personalize their coffee experience with new flavors, recipes, tastes, appliances, and accessories.”
• Wendy’s continues to grow via nontraditional locations. Shortly after inking a deal to add 700 locations via REEF Kitchens, the quick-service restaurant chain opened a Hamburger Stand unit in an Ohio Walmart. And later this year, it will open a Wendy’s Snack Shop in another Ohio Walmart. Both concepts feature more streamlined menus than a typical Wendy’s restaurant offers. Wendy’s move into the box retailer’s locations comes after Walmart saw concepts such as McDonald’s and Subway pull out.
• After raising $14 million in funds, home-cooked food delivery service WoodSpoon is ready to expand. Burger King's parent company Restaurant Brands International was among a group of investors that will help fuel this growth. New York-based WoodSpoon was started in 2019 by Oren Saar and Merav Kalish Rozengarten, two Israelis in America that longed for the food they grew up with. They began reaching out to local home chefs in the area and gathered them together in a marketplace where they could share their culture and passion for food with others. Two years later, the company has more than 16,000 active customers in Manhattan, Brooklyn and Queens and 50% month-over-month growth.
• Trey Parker and Matt Stone, creators of the Comedy Central television show “South Park,” will purchase Casa Bonita. The Lakewood, Colo.-based restaurant and entertainment center was the setting of a popular episode of their TV show. The restaurant has faced financial hardship, having filed for bankruptcy protection after remaining closed to diners throughout the pandemic. A “Save Casa Bonita” group has fought to keep the restaurant operational, including through an online fundraising campaign.
• Growth Chains: Another Broken Egg Café will open its fourth Indiana location next week in Indianapolis. Captain D’s added a location in Clarksville, Miss. Hoots Wings, a fast-casual spinoff of the Hooters chain, plans to add 18 units in Southern California over the next 5 years. The chain currently has eight locations open. Marco’s Pizza plans to add five locations in the Cleveland market by 2025. Pizza Inn inked a development deal to open five units in Qatar, with the first restaurant projected to open in March 2022. Twin Peaks added restaurants in the Texas municipalities of Amarillo, Burleson and Grand Prairie.
• Chain Operating Results: Multiconcept operator BBQ Holdings announced the financial results for its second fiscal quarter ending July 4, 2021. For its Famous Dave’s locations, same-store sales increased 2% compared to 2020 and 14.5% compared to 2019. Same-store sales for franchised units increased 42.7% compared to 2021 and 4.4% compared to 2019. For the company’s Granite City chain, same-store sales increased 138.6% compared to the same period in 2020 and declined 10.4% compared to the same period in 2019. BurgerFi reported a 39% increase in same-store sales for corporate units compared to the same period in 2020. The chain also reported same-store sales also exceeded 2019 levels. BurgerFi’s franchised units reported a 45% increase in same-store sales for the second water. And the chain reported digital sales increased 12% year over year. For its second fiscal quarter of 2021, WaBa Grill reported same-store sales increased 39.2% over the same period in 2020 and 28.7% compared to 2019.