The U.S. Census Bureau’s Advance Sales for February reported both total retail sales and foodservice and drinking place sales increased over January. Hooters is a on roll. These stories and more This Week in Foodservice.

Based on their advance monthly numbers, the U.S. Census Bureau reported that total retail sales increased 0.3% in February from January and rose 17.6% over February 2021. The total retail advance sales figure for January over December 2021 was revised up from 3.8% to 4.9%.

The advance report also found Foodservice & Drinking Place sales were up 2.5% in February from January. Foodservice sales were up 33.0% from February 2021. The advance sales figure from January vs. December 2021, reported as down 0.9%, was revised down slightly to minus 1.0.%.

It may be the January sales decline was simply a statistical blip and restaurant business recovery will continue. 

There are some important factors to consider when reading the data above. To begin with, only restaurants and bars are included in the survey. Excluded are hotels, motels, resorts, convenience stores and other retailers, as well as the so-called institutional sectors — employee feeding, K-12 schools, colleges and universities, hospitals, nursing homes, retirement facilities and military feeding. Next, the sales figures are adjusted for holidays, weekends and seasonal changes but not for menu price changes. Finally, the Census Bureau is continually adjusting the survey numbers as later data becomes available and many of the updates are significant.

Economic News This Week

• Initial jobless claims declined by 15,000 to 214,000 for the week ending March 12. The 4-week moving average decreased 8,750 claims to 223,000.
• The Empire State Manufacturing Survey from The Federal Reserve Bank of New York found business activity in New York state declined in March. General Business Conditions Index plunged 14.9 points to minus 11.8, its lowest level since May of 2020, which was in the heart of the pandemic (Any number less zero indicates contraction.) The New Orders Index fell 11.2 points, finishing at 14.8. Shipments tumbled 10.3 points ending at minus -7.4. The Unfilled Orders Index declined 1.3 points while staying within the expansion range of 13.1. Both of the employment indices (Number of Employees and Average Employee Work Week) experienced sharp drops while staying in a growth area.
• The Philadelphia Federal Reserve reported that, based on its Manufacturing Business Outlook Survey, manufacturing activity continued to grow in March in the region covered by the bank. The Index for General Activity rose 11 points to 27.4, the highest since November 2021. The New Orders Index increased 12 points to 25.8, while the Shipments Index increased 17 points to 30.2. The Employment Index increased to 38.9, its highest reading ever. The Average Work Week Index rose 5 points to 21.3. Overall, this is an outstanding report.
• The U.S. Federal Reserve reported that consumers increased their borrowing at a seasonally annual rate of 1.9% in January. Revolving credit, which is made up mostly credit card debt, decreased at an annual rate 0.3%; nonrevolving credit, which includes auto loans, student loans, etc., increased at an annual rate of 2.6%. If this trend continues, it may indicate consumers are getting their finances in order because they believe the economy is weakening.
• The U.S. Census Bureau stated that privately-owned housing starts were up 6.8% in February from January and were up 22.3% over February 2021. Building permits issued for privately owned homes declined 1.9% in February from January increased by 7.7% over January 2021.
• The National Association of Realtors reported that existing home sales fell 7.2% in February from January to a seasonally adjusted annual rate of 6.02 million. Sales were up in January after declining in December. Home buyers are facing higher prices, limited inventory and rising mortgage rates.

Foodservice News This Week

• Speculation on McDonald’s Takeover by Russian Government. Earlier this week Russian prosecutors threatened to seize the assets and arrest the employees of foreign-based companies shutting down their operations in their country. McDonald’s is especially vulnerable to having their business nationalized because, unlike most restaurant chains whose franchisees own the stores, McD’s owns 85% of their Russian units. Relatedly, a Russian-owned local alternative, Uncle Vanya, has unveiled a new red and yellow logo that looks nearly identical to McDonald's iconic Golden Arches. The apparent plan is to take over shuttered McDonald’s locations.
• Baby Boomers eager to dine out. When 725 Baby Boomers were asked what they planned to spend their disposable income on this year, top on the list was dining out, according to 5W Public Relations recently released “Consumer Culture Report.” Dining out was cited by 37.1% of the respondents, followed by clothing and fashion (24.4%), travel and experiences (22.8%), electronics and technology (21.8%), home goods and furniture (20.8%) and health and wellness (19.9%).
• Hooters seeks smaller footprints, adds virtual betting and virtual brands. It appears that Hooters is now in one of their “up” phases with same-store sales up 29% on a year-over-year basis. The chain has committed to a smaller footprint to hold down costs. Hooters three virtual brands (Hootie’s Burger Bar, Hooties Chicken Tenders and Hooties Bait & Tackle) are attracting new customers on third-party sites. The company also sees potential in their fast-casual spin-off, Hoots Wings. However, Hooters believes there is a tremendous opportunity in sports betting and is working with DraftKings and PointsBetto to develop programs for their operations. Currently, they have sports betting in their restaurants in Indiana, Tennessee and Virginia. They have also signed an agreement with BetRivers for sports betting in Hooters in Indiana, New Jersey and Pennsylvania. 

• Different Takes on Ghost Kitchens. WOWorks, the parent company of Saladworks, Frutta Bowls, Garbanzo Mediterranean and The Simple Greek, is rolling out 20 locations with Combo Kitchen. All will be located in WingHouse restaurants in Central Florida. Combo Kitchen works with franchisees to bring more cuisine types to their restaurants. WingHouse will fulfill Saladworks orders online or at the brick-and-mortar restaurant. Qdoba, on the other hand, said their ghost kitchen strategy is about leveraging strong brand recognition. The chain is running what they term a “pilot” in 25 locations along with ghost kitchen giant REEF. The objective is to determine how ghost kitchens will help in markets with a lot of Qdoba stores, those markets that are under-penetrated and entirely new markets.

• Casey’s convenience store chain wants to hire 5,000 Employees. Casey’s, a fast-growing c-store chain known for its large pizza business, will hold a “Here For Good” hiring event on March 23 and 24.
• Two Florida hotels “employ” robots to serve food. At the Marriott Fort Lauderdale, the newest server is “Betty Bot” who does what all servers do. She takes orders, delivers them to the Marriott’s Kitchen, serves the food to the guests and buses tables. The AC Hotel Miami Dadeland has its hotel guests use a QR code they receive upon check-in to place orders at any of the participating restaurants in the area. The restaurant puts the food in the robot for delivery back to the hotel guest. The move connects to a larger trend of automation happening throughout the foodservice segment.
• Growth chains: Marco’s Pizza, with a goal of reaching 1,500 stores by the end of next year, has announced they have inked a deal that will open 46 restaurants in Phoenix in the next 6 years. Taffler’s Tavern will grow from 2 taverns to 7 this year.
• Comparable store sales reports: Arcos Dorados up 33.2%, Brinker International (Brinker up 7.7%, Chili’s up 21.2% and Maggiano’s up 78.1%), El Pollo Loco (system up 11.0%, company operated up 6.2% and franchised up 14.2%).

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