U.S. retail sales were flat in July. Froyo chain 16 Handles gets a new owner. Restaurant operators face steep challenges, per a National Restaurant Association study. Jack in the Box looks to sell some company-owned Del Taco units. These stories and a whole lot more This Week in Foodservice. 

Total retail sales in the U.S. in July were disappointing, showing no increase from June, per data from the U.S. Census Bureau. The June advance reading was unchanged, too. In the first 7 months of 2022, total retail sales are up 10.2% from the same period last year. The July result was pretty much in line with forecasts.

Foodservice and drinking place sales inched up 0.1% in July compared to June. In the 7-month period ending in August of this year restaurants and bars are up 20.0% from the 7-month period ending in August of 2021.

Some observers may look at July retail sales as evidence the economy continues to slide down while others perceive it as an indication that consumers are continuing to spend.

Economic News This Week

• Initial jobless claims totaled 250,000, a decline of 2,000 for the week ending August 13, per data from the U.S. Department of Labor. The 4-week moving average totaled 245,750, a decline of 2,750 claims.
• Total industrial production increased 0.6% in July, per the U.S. Federal Reserve. Manufacturing output gained 0.7% after falling 0.4% in each of the last 2 months. The index for mining rose 0.7%, while the index for utility output fell 0.8%. Capacity utilization increased 0.4% in July for a total of 80.3%, which is 0.7% greater than its long-run (1972-2021) average.
• Manufacturing activity “declined sharply” in August in the New York region, per the Empire State Manufacturing Survey. The general business conditions index plunged 42 points for a reading of -31.3. New orders and shipments also plummeted.
• Philadelphia area manufacturing activity increased unexpectedly in August, per the Philadelphia Federal Reserve. After two consecutive negative readings, the current activity index rose 19 points for a reading of 6.2. The employment index 5 points for a reading of 24.1. The out put and new orders showed only modest growth and the 6-month forecast indicated a significant slowdown.
• July housing starts declined 9.6% from June, per the U.S. Census Bureau, and are down 8.1% from July last year. Single-family housing starts declined 10.1% in July compared to June. The number of building permits issued in July declined 1.3% From June.
• Existing home sales declined 5.9% in July, per the National Association of Realtors. This marks the sixth straight month that existing home sales declined. Existing home sales prices increased in all likelihood because of a small supply.

Foodservice News This Week

• Frozen yogurt chain 16 Handles has been acquired by the brand's largest franchisee. New York entrepreneur Neil Hershman will now lead the 30+ unit franchise brand. Hershman, who owns five 16 Handles locations, will serve as CEO. He is joined by investor and co-owner Danny Duncan, who will serve as the brand's chief creative officer. Duncan is a comedic YouTuber who has amassed more than 1.5 billion views on the platform and generated more than $50 million in merchandise sales from 2020-2021, per a release. 16 Handles was founded by Solomon Choi in 2008 and the company has locations across five states.
• Jack in the Box wants to sell some Del Taco units to franchisees, per published reports. Jack in the Box explained the move is essential for financial purposes in that by reducing the number of assets the company holds on its balance sheet the multiconcept operator has better access to securitized debt which is usually cheaper and often doesn’t require the onerous debt agreements that than conventional loans do. Jack in the Box announced a deal to acquire Del Taco in December 2021.
• Buffalo Wild Wings has entered the pizza business, per published reports. BWW introduced a new menu item called Boneless Bar Pizza. The chain is rolling out this new menu item in time for the kickoff of the football season and is pricing it in such a way to appeal to value-conscious consumers.
• Unfortunately, restaurant operators' outlook remains pessimistic, per a study from The National Restaurant Association. And with good reason. While wholesale food prices have increased 16.3% in the last 12 months, menu prices have only risen 7.6% in the same period and only 16% of operators report adding fees or surcharges to customer checks. The result: Profits are suffering. 85% of operators say their restaurant is less profitable than it was in 2019. Despite adding 74,000 jobs in July, in the new survey, 65% of operators report not having enough employees to support customer demand and 84% of operators say they will likely hire additional employees during the next six months. Indeed, running a restaurant is a challenge even in the best of times but these economic headwinds really up the ante.
• Growth Chains Multi-concept operator Fatburger announced the opening of the first of 50 planned co-branded Fatburger/Buffalo’s Café restaurants in Mexico. Multiconcept operator JINYA Holdings is bringing its three brands to Honolulu. The company opened a 10,000-square-foot location housing its Robata JINYA and LBD Japanese Bar & Lounge concepts. The company also opened its JINYA Ramen Bar in the city.

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