A recent study shows that a high percentage of restaurants that did not receive government funds relating to the pandemic may fail. Some experts think the labor shortage may never go away. Ghost kitchen startup Reef Technologies closes roughly a third of their business. These stories and a whole lot more This Week In Foodservice.

According to a recent study, 4 out of 10 restaurants that did not receive government aid during the pandemic may be heading for bankruptcy. The study, released by the Independent Restaurant Coalition, showed 28% of those same restaurants have received or expect to receive an eviction notice. The $8.6 billion Restaurant Revitalization Fund received more than 370,000 applications from restaurants but more than 177,000 operators received nothing.

Of those restaurants not receiving money from the fund, 41% took out new personal loans, 25% had to sell a personal asset, 30% decreased staff and 49% laid-off workers. For comparison, among restaurants that did receive government relief, just 9% took out new personal loans, 10% had to sell a personal asset, 21% had to decrease staff and 33% had to lay off workers.

The most recent variation of the virus, less deadly or not, compared to the original strain is still wreaking havoc on restaurants

Economic News This Week

• Initial jobless claims jumped by 55,000 to 286,000 for the week ending January 15. The 4-week moving average increased 20,000 to 231,000.
• In a recent episode of 60 Minutes, there was a story on the labor shortage. A labor expert being interviewed laid out the causes for the problem including a major shift in workers’ attitudes. When she was asked by the interviewer when the situation would improve, she replied, “Never.”
• The Institute for Supply Management reported that the manufacturing sector grew In December with 15 of the 18 manufacturing industries surveyed experiencing growth for the month. The Manufacturing PMI fell by 2.4 points to 58,7. Production fell by 2.3 points New Orders fell by 1.1 points, Order Backlogs rose by 0.9 points.
• The Institute for Supply Management also said that the service sector grew in December with 15 of 16 service businesses surveyed reporting growing in December. The Institute lists the service industries by their growth rates and the first was Accommodations & Foodservices. The Services PMI dropped by 7.1 points to 69.1, Business Activity/Production was down 7.0 points. New Orders were down 8.2 points and Order Backlogs were down 3.6 points.
• The US Census Bureau reported that total construction in November 2021 increased 0.4% over October. Total construction spending in November last year was up 9.3% over November 2020.

Foodservice News This Week

• Reef Technologies hits a speed bump. The ghost kitchen startup that operates 330 food trailers, including some for Wendy’s, Burger King and Nathan’s Famous, announced they will be “pausing operation” on 95 trailers that were described as underperforming (less than $500 a day.) A Reef Technologies spokesperson declined to say when the closed units might be reopened but said they are coming off the company’s most successful quarter in its history and that they are “reviewing and refining” operations like any growing business.
• McDonald’s is expanding its McPlant burger test. Initially tested in just eight locations, the meat-free McPlant will be rolled out to 600 stores across Texas and California. This expansion has led to speculation that McD’s is planning on moving the plant-based product into national distribution but the burger giant has not shared their future plans for the McPlant. However, there are reports that the vegetable burger is considered a success with the average test store selling 70 a day.
• Friendly’s introduces fast-casual called Friendly’s Café. The 2,700-square-foot design will seat 45 customers and features a to-go area for pickup orders. The first of the new concepts will open in Westfield, Massachusetts in February.
• Growth Chains: Ojos Locos Sports Cantina which the chain’s management describes as a Hooters or Twin Peaks for Hispanics, currently has 18 restaurants and will open 11 more this year. The company is aiming for 150 stores by 2025.
• Comparable Store Sales Reports: Bad Daddy Hamburgers up 8.9%, Darden Restaurants (Blended up 34.9%, Longhorn Steakhouses up 2%, Olive Garden up 29.3%, Fine Dining up 61.6% and Other Businesses up 42.9%) and Good Times Burger up 19.5%.

For comparable-store sales on other chains, check out the Green Sheet.