The good and bad of the U.S. Census Bureau’s sales figures for January. IFMA updates its forecast. Jamba adds two more automated smoothie locations. These stories and more This Week in Foodservice.

First the good news: The U.S. Census Bureau’s advance estimate of retail sales showed significant overall growth in January. Now the bad news: foodservice sales declined for the second consecutive month. Now for the numbers. Advance total retail sales for January 2022 increased 3.8% from December 2021. And they increased 13.0% from January 2021.

Sales at foodservice and drinking places declined 0.9% from December but increased 27.0% from January 2021. This is the second month in a row that sales at foodservice and drinking places declined on a month-over-month basis.

In its analysis of these results, the National Restaurant Association put a finer point on the data.

“While most of the economy showed growth in January, restaurant sales were down for the second month in a row; after adjusting for inflation, sales were nearly $3 billion below mid-2021 levels,” says Sean Kennedy, executive vice president of public affairs for the NRA. “Small business restaurants aren’t like other small businesses. Even in the best of times, they’re performing a balancing act to provide outstanding service and make ends meet. Thousands of these restaurants were left in limbo when the Restaurant Revitalization Fund closed, and without the replenishment, there’s a good chance we’ll start seeing many of them close.”

Eighty-eight percent of restaurants experienced a decline in customer demand for indoor on-premises dining in recent weeks, as a result of the increase in coronavirus cases across the U.S. due to the omicron variant, per an NRA survey of 4,200 restaurant operators fielded in January 2022. This forced restaurants to take a number of actions including:

• 51% reduced hours of operation on days that it is open
• 34% closed on days that it would normally be open
• 26% reduced seating capacity
• 10% changed to only offering off-premises for a period of time

Economic News This Week

• Initial jobless claims totaled 248,000, an increase of 23,000 for the week ending February 12, 2022, per the U.S. Department of Labor. The 4-week moving average totaled 243,250, a decline of 10,500.
• The January Producer Price Index for Final Demand increased 1.0%, per the U.S. Bureau of Labor Statistics. In the last 12 months, this economic indicator is up 9.8%. The Producer Price Index for Foods increased 1.6% in January.
• The New York Federal Reserve’s Empire State Manufacturing Survey showed little change in manufacturing activity in New York State in February. The General Business Conditions Index edged up 4 points for a reading of 3.1. The New Orders Index rose to 1.4. The Shipments Index changed little, rising 1.9 points. The Unfilled Orders Index did improve by 2.3 points for a reading of 14.4. Both employment indicators were in positive territory.
• The Philadelphia Federal Reserve’s Manufacturing Business Outlook Survey reported manufacturing activity continued to expand in February. The Index for Current Activity fell 7 points for the month but stayed well in the growth area at 16.0.
• January's existing-home sales increased 6.7% from December, per the National Association of Realtors. This represents the sales of 6.5 million homes on a seasonally adjusted annual basis. Compared to January 2021 sales fell 2.3%. The strong sales performance of January 2022 came despite a 16.5% decline in the inventory of homes for sale compared to one year ago. In contrast, prices are up 15.4% from a year ago.
• January housing starts declined 4.1%, per the U.S. Census Bureau. Some observers think at least part of the decline was due to severe weather in many parts of the country. To the surprise of some, the number of building permits issued increased by 0.7%.
• The Conference Board’s Leading Economic Indicators Index declined 0.3% in January, which the research firm categorized as a small decline. The Leading Economic Indicators Index now stands at 119.6 (2016 = 100). The LEI rose 0.7% in December and 0.8% in November. The Conference Board attributes the January decline to a variety of factors, including the Omicron wave, rising prices and supply chain disruptions. Despite these challenges, the Conference Board says widespread strengths among the leading indicators point to continued but slower economic growth.

Foodservice News This Week

• The foodservice industry will grow at a rate of 4.6% in 2022 compared to 2021, per a revised forecast from the International Foodservice Manufacturers Association. In comparison, the industry posted a year-over-year growth rate of 10.4% in 2021, per IFMA data. In 2020, IFMA reported overall industry sales declined 29.6%. Looking ahead to 2023, IFMA projects year-over-year industry growth of 0.9%. It’s important to note these growth rates do not take inflation into account.
• Jamba Juice added automated smoothie kiosks at Georgia College and Kennesaw State University, per published reports. The smoothie rolled out its first automated kiosk in late 2020 in a California Walmart. Based on the success of that location, Jamba expanded its pilot to a shopping mall in California in 2021. Jamba will continue to explore non-traditional locations, such as gyms, hospitals, and airports as part of its development plan.
• Foxtrot continues to reimagine the c-store experience. Foxtrot offers an all-day café, a 30-minute delivery app, and derives about half of its revenue from what the chain classifies as e-commerce sales, per a report from The Food Institute. The chain uses its own mobile app and hires its own delivery couriers. Founded in Chicago in 2013 as an online-only alcohol and food delivery company, Foxtrot has since opened 17 brick-and-mortar stores located in Chicago, Dallas and Washington, D.C. Foxtrot has raised $160 million in capital for expansion and plans to add 50 stores in the next 2 years.
• Smokey Bones plans to install drive-thru pickup windows, per published reports. The 61-unit chain describes the new additions as “digital drive-thru lanes” as they offer digital menu boards and digital order confirmation. Smokey Bones believes wholeheartedly the concept needs to offer both off-premises options and dining rooms to serve its customers. And it is not the only fast-casual chain to explore adding drive-thru service of late. Notably, Jimmy John’s debuted its first drive-thru-only location earlier this month.
• Growth Chains: Cheesecake Factory opened 4 restaurants in the last quarter of 2021 meeting the company’s goal of adding 14 locations last year. Wingstop Restaurants opened just over 100 units last year.
• Same-store sales: Bloomin’ Brands (combined up 27.9%, Outback up 28.7%, Carrabba’s up 24.4%, Bonefish Grill up 39.0% and Flemings up 71.1%.), BJ’s up 45.6%, Burger King up 1.3%, up 33.8% and Chipotle Mexican Grill up 15.2%.

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