Is the restaurant industry labor crunch starting to wane? The Small Business Administration is asked to forgive loans made during the pandemic. Hardee’s gets a brand refresh, while Portillo’s tests a cashless drive-thru. Plus, Chicago approves testing of food delivery robots. These stories and more This Week in Foodservice.
Is the foodservice labor crunch easing? Perhaps. A Bloomberg article says the restaurant labor industry’s shortage, which closed restaurants and dining rooms, is at least easing if not ending. The says chains like Del Taco, Portillo’s and Chipotle are now reporting that hiring and maintaining staff has become significantly easier. For example, Chipotle says its staffing levels are “much higher” than they were two years ago.
Government data seems to support this turnaround story, too. Job openings at U.S. foodservices and drinking places have been on the decline for the last two months and are down from a high in December of 2021, per The U.S. Bureau of Labor Statistics. Employment at U.S. foodservice businesses and bars was 11.7 million in August, which is up from 6.3 million during the pandemic. The 11.7 million is also very near industry employment levels for March 2020.
A number of factors are responsible for the change. The pandemic stimulus programs have ended. Consistent child care has enabled more women to join the labor force. Inflation has driven up household expenses necessitating more family members working. And, the fear of infection, which at previously kept some people at home, has ebbed.
Some observers, though, caution that the gain in employment may be primarily limited to major chains who can better afford higher wages and benefits.
Economic News This Week
- Initial jobless claims totaled 213,000, an increase of 5,000 for the week ending Sept. 17, per the S. Department of Labor. The 4-week moving average totaled 216,750, a decrease of 6,000 claims. The recent number of jobless claims have been well within the normal range and have raised no indication of an oncoming recession.
- Existing home sales took a “slight dip” in August, per the National Association of Realtors. Sales declined 0.4% on a month over month basis compared to July. Compared to August of 2021, sales were down 19.9% for the month and 4.8 million on a seasonally adjusted annual basis. The number of existing homes on the market remains low with many homeowners reluctant to give up their low interest loans.
- Private housing starts increased 12.2% in August on a month over month basis from July, per data from the U.S. Census Bureau. Housing starts declined 0.1% from August 2021. Single-family housing starts were up 3.4% from July. Building permits for privately owned housing units fell 10% from July and 14.4% from August 2021.
- The Conference Board’s U.S. Leading Economic Index declined 0.3% in August. This follows a 0.5% decline in July. The Conference Board now projects a recession in the coming months.
Foodservice News This Week
- The National Restaurant Association has requested the Small Business Administration grant debt relief to small restaurants and other small businesses who received economic injury disaster loans. The NRA contends that many of these borrowers are in no economic position to repay the loan and requests the Small Business Administration eliminate the accumulated interest on the loan, lower the interest rate to 1.0% from 3.75% and establish a repayment plan for the borrowers to last 10 years and if successfully complete, the remaining 20 years of payments would be eliminated. The chances of the NRA’s proposal being accepted are unknown at this point.
- Dave & Buster’s adds a way to increase food and beverage sales among gamers visiting its locations. According to Dave & Buster’s management, the chain’s customer base includes a lot of people who visit its locations to only play games. Known as Game & Go, the solution is in essence a 300-square-foot c-store offering beverages, including beer and wine, and snacks. But there is a twist. Game & Go features cashierless technology which reads the customers’ credit cards upon entering but doesn’t charge them until they leave the c-store. Dave & Buster’s believes the ease of purchase coupled with the high-tech feature will appeal to the typical electronic game player.
- Darden Restaurants’ financial results missed the mark for the multiconcept operator’s first fiscal quarter, per published reports. NBC News stated that performance fell short of projections particularly for Olive Garden and Longhorn Steakhouse. Inflation is taking a toll in that Darden’s price increases have fallen short of cost advances. This scenario is likely indicative of the challenges all operators face.
- Robots are coming to Chicago. Add the Windy City to a growing list of municipalities allowing food stores and restaurants to begin limited testing of personal delivery devices, also known as PPDs. Other cities already testing the use of PPDs includes Los Angeles, Pittsburgh and Washington, D.C. The test must occur in defined areas and requires extensive use of obstacle detection technology.
- CKE Restaurant Holdings rolled out a refresh of its Carl’s Jr. and Hardee’s chains. The new design draws inspiration from the brands’ flavors and ingredients. It also includes a makeover of the Hardee’s Happy Star logo.
- Do cashless drive-thrus represent a trend in the fast lane? Portillo’s Hot Dogs is testing a cashless drive-thru in its Elmhurst, Ill., location. The chain believes it is safer for their employees and makes the drive-thru process faster, per an email it sent to customers in the region announcing this development. Earlier this year, Portillo’s opened its first triple-drive thru location in Joliet, Ill.
- Growth Chains: Flush with $100 million in funding for expansion, True Food Kitchens plans to open 10 fast-casual restaurants in the next 2 years.
- Comparable Store Sales Reports: Darden Restaurants (Blended up 4.2% Longhorn Steakhouse up 4.2%, Olive Garden up 2.3% Fine Dining up 7.6% & Other Businesses up 7.6%.)