Rising interest rates are spurring the exit of some longtime KFC executives. Loyalty programs are proving to be valuable to foodservice operators in today’s economy. Yum! Brands takes another step toward exiting Russia. RoboBurger plans to grow via some new funding. 

Don’t have a rooting interest in Major League Baseball’s upcoming World Series? Maybe consider the Houston Astros.

That’s because according to Morning Brew, the surest sign of an oncoming economic crisis is a Philadelphia-based baseball team winning the World Series.

The Philadelphia Athletics won the World Series in 1929 then the Phillies won it in 1980 and 2008.

While logic indicates the Phillies winning the World Series will not negatively impact the economy, one can never be too safe, right?

Economic News This Week

• Initial-jobless claims totaled 214,000, a decrease of 12,000 for the week ending October 15, per the U.S. Department of Labor. The 4-week moving average totaled 212,250, an increase of 1,250 claims.
• Existing home sales fell in September, per data from the National Association of Realtors. This marks the eighth consecutive month-over-month sales decline. Sales dropped 1.5% from August to a seasonally adjusted annual rate of 4.71 million. Sales declined 23.8% from September of 2021. Despite rising interest rates, the median existing-home sales price increased to $384,800, up 8.4% from one year ago.
• The Chicago Purchasing Managers Manufacturing Index fell to 45.7 in September from 52.2 in August. Any reading of less than 50 indicates contraction. This is the lowest the index has been in more than two years.
• Manufacturing activity continued to decline in the Philadelphia area in October, per the Philadelphia Federal Reserve. Despite edging up 1 point, general activity remained in negative territory at -8.7. The index has now been in negative territory in four of the last five months.
• Industrial production increased 0.4% in September, per the data from U.S. Federal Reserve. Manufacturing output rose 0.4% while mining out rose 0.6%. Utilities output fell 0.3%. Capacity utilization increased 0.2% in September for a reading of 80.3%, which is 0.7% greater than its long-run (1972-2021) average.

Foodservice News This Week

• RoboBurger secured $10 million in funding via a partnership with private equity firm Promethean Investments, per a company release. The new funding will allow RoboBurger, which grills, toasts, adds condiments and assembles a burger in four minutes, to grow and increase production of its RoboBurger Mark 2 units. RoboBurger opened its first location in March in New Jersey. Target locations for the company’s second-generation units include a Pilot Flying J in New Jersey, a university in Queens, New York, and The Port Authority Bus Terminal in Manhattan.

• Yum! Brands reached an agreement to sell its Russian KFC restaurants to Smart Service Ltd., the company reported. This deal paves the way for Yum! Brands to exit from the Russian market. Under the agreement, the buyer assumes responsibility for rebranding locations to a non-Yum! concept. In addition, the buyer becomes responsible for retaining the company’s employees in Russia. Completion of the transaction is subject to regulatory and governmental approvals, as well as other conditions agreed to by the parties.
• A number of KFC executives have filed for early retirement, per a report in the Wall Street Journal. Further, these executives plan to take their pensions in a lump sum. The IRS has been raising interest rates on what it refers to as IRS-set segment rates. As interest rates climb, it can be financially beneficial for an employee later in their career to retire and take the lump sum before potentially escalating segment rates reduce the payout. A spokesperson for Yum! Brands, KFC’s parent company, says the firm is deep in management talent and the loss of this experienced group will not be a problem. The spokesperson also points out that not many current employees are in the program since it was closed to new participants in 2001.
• Loyalty programs are paying off big time for restaurants and c-stores, per a report published by The Food Institute. According to one study, the most loyal 2% to 3% of a concept’s customers account for 5% to 17% of its revenue. Moreover, 55% of restaurants said their loyalty checks have increased more than the price of their items.
• McDonald’s will test Krispy Kreme donuts in a limited number of locations, the company reports. One test area is nine McDonald’s units in the Louisville area. The CEO of Krispy Kreme said that donuts are a great addition to McDonald’s menu by offering a low-cost luxury in tough economic times. In addition, McDonald’s is planning what the company describes as a “farewell tour” for the McRib sandwich, beginning on October 31.
• Growth Chains: Island Fin Poké Co. entered the Utah market by bringing its Hawaiian custom poke bowls to Salt Lake City. Puttshack, the miniature golf chain, which just opened in Boston, plans to add locations in Virginia and Miami.
• Comparable Store Sales Reports: Cracker Barrel up 6.1%.

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