December retail sales fell from November but rose from December 2020. TGI Fridays explores a new format. Introducing HiBar Hospitality Group. These stories and more This Week in Foodservice.

U.S. retail and foodservice sales totaled $626.8 billion in December 2021, per the U.S. Census Bureau. This marks a 1.9% decrease from the previous month, but a 16.9% increase compared to December 2020. Some economists attribute December’s decline to rising prices.

Total sales for October 2021 through December 2021 increased 17.1% compared to the same period in 2020. Retail trade sales declined 2.1% from November 2021 but increased 14.4% from December 2020. Gasoline station sales increased 41.0% from December 2020, while foodservice and drinking place revenues grew 41.3% compared to last year.

The report also showed foodservices and drinking place sales dropped by 0.8% from November but was up a substantial 41.3% from December 2020.

There are some things to consider when reading the report. The survey does not cover the entire foodservice industry but only the restaurant market. The sales numbers are adjusted for holidays and seasonal variations but not for price changes.

Economic News This Week

• Initial jobless claims increased 23,000 for a total of 230,000 during the week ending January 8, 2022, the U.S. Department of Labor reports. The 4-week moving average was 210,750, an increase of 6,250 from the previous week.
• The Producer Price Index for Total Final Demand increased 0.2% in December, reports the U.S. Bureau of Labor Statistics. Without food and energy prices, the “core index” was up 0.5% for the month. For all of 2021, the total index rose 9.7% while the core index was up 6.9%.
• The Consumer Price Index increased 0.5% in December, per the U.S. Bureau of Labor Statistics. This is 0.3% less than November’s increase. Over the last 12 months, the index increased 7.0%. The index for all items less food and energy rose 0.6% in December following a 0.5% increase in November. This was the 6th time in the last 9 months it has increased at least 0.5%. Despite this increase, jobless claims have remained near or below their pre-virus levels for more than a month. This serves as a nod to the continued slowdown in firings and other involuntary separations as employers retain their existing workforces. New claims had averaged around 220,000 per week throughout 2019. And in early December, weekly claims had improved to come in below 190,000 for the lowest since 1969.
• Industrial production declined 0.1%, the U.S. Federal Reserve reports. Losses of 0.3% for manufacturing and 1.5% for utilities were partially offset by a gain of 2.0% for mining. For the fourth quarter as a whole, industrial production rose at an annual rate of 4.0%. At 101.9% of its 2017 total, industrial production in December was 3.7% greater than it was at the end of 2020 and 0.6% more than its pre-pandemic (February 2020) reading. Capacity utilization for the industrial sector edged down 0.1% in December to76.5%, a rate that is 3.1% less than its long-run (1972-2020) average.
• The University of Michigan Index of Consumer Sentiment declined 2.5% for a reading of 68.8% in the university’s preliminary January study. This is the second-lowest the index has been in a decade, with the lowest level occurring in November 2021. The Current Economic Conditions Index declined 1.3% for a reading of 73.2%. The Index of Consumer Expectations dropped totaled 65.9%, a decline of 3.5%.

Foodservice News This Week

• Consumer food prices increased 0.5% in December and 8.3% for all of 2021, per the U.S. Bureau of Labor Statistics’ Consumer Price Index. Food-at-home prices increased 0.4% in December and 6.5% for the year. Food-away-from-home prices grew 0.4% in December and 6.0% for all of 2021.
• Despite the support from last year’s Restaurant Revitalization Fund, some restaurants and bars still need additional government support to stay afloat. Data released by the Independent Restaurant Coalition says 86% of restaurants and bars that did not receive funding in the first go-round remain at risk of closing permanently, per published reports. To help generate renewed support in Washington, D.C., the IRC continues to encourage restaurant operators to contact their congressional representatives.
• California Governor Gavin Newsom has introduced a plan that waives fees and provides grants and tax breaks for small businesses, including restaurants. The proposal includes some small businesses not having to pay state tax on grants received from the federal government and it allocates $3 billion to help businesses begin paying down pandemic-induced unemployment insurance fund debt. This proposal has left some small business owners hopeful, including the owner of a Sacramento restaurant. This news was also warmly received by the California Restaurant Association, which released a statement that said: “The California Restaurant Association applauds Governor Newsom for his thoughtful budget approach, which will help thousands of small businesses – including restaurants – as they try to weather the pandemic fallout…These proposals could tip the balance, giving more restaurants a greater chance to stay open.”
• Hopdoddy Burger Bar will acquire Grub Burger Bar. The two brands are both owned by L Catterton and will combine to form a new company known as HiBar Hospitality Group. The new company will have a total of 50 restaurants, including 31 in Texas. Jeff Chandler, Hopdoddy CEO will lead the new company. Jimmy Loup, founder of Grub Burger, will retain a stake in the business and join the new company’s board of directors.
• Smokey Mo’s TX BBQ was acquired by Austin, Texas-based Switchback Capital, which has plans to grow the 16-unit Texas barbecue chain.
• TGI Fridays will introduce a concept called Friday’s on the Fly. The 2,500 square foot concept will offer take-out and delivery services. TGI Friday’s management pointed out that restaurants had to have large dining rooms in the past because most customers wanted to eat between 5:30 p.m. and 7:00 p.m. Since the pandemic, though, a high number of meals are now consumed off-premises so the new concept prompting casual dining chains to explore new formats. is important both in the US and the overseas markets.
• Is the Bob Evans restaurant chain for sale? Published reports say parent company Golden Gate Capital is exploring a deal that could reach a value of $600 million for the family dining chain. The investment firm purchased Bob Evans 5 years ago for $565 million. It also owns such chains as California Pizza Kitchen and Red Lobster.
• Challenges in the food supply chain have some companies getting creative. In a development that harkens back to the old Wendy’s commercial that infamously claimed “parts is parts,” some operators are offering less expensive chicken parts including thighs and ground chicken on their menus, as the Wall Street Journal reports.
• Growth Chains: Brooklyn Dumpling Shop is set to open up to five locations in Philadelphia. IHOP will open a restaurant in the Bahamas, the first of 16 stores planned for the Caribbean. The One Group Hospitality will open 13 STK Restaurants and 3 Kona Grill Restaurants in 2021 and 2022. Twin Peaks signed a 24-unit expansion agreement for Mexico.
• Comparable Sales Reports: Denny’s (Systemwide sales in the U.S. up 0.7%, company-owned units up 5.1% and franchised units up0.4%) and One Group Hospitality (Kona Grill up 26.9% and STK up 63.8%. It is important to note the One Group Hospitality comparisons are based on 2019 sales data vs. 2021.)

For the comparable store sales reports of other chains, please click here for the latest Green Sheet.