Lots of jobs data to digest. Jack in the Box makes news on two fronts. And a new study takes another look at exactly how many restaurant industry jobs robots could perform. These stories and more This Week in Foodservice.
Despite the fact that healthy eating remains such a popular trend, consumers still maintain a sweet spot in their stomachs when it comes to dessert. And like most other aspects of menu development, innovation is critical.
In fact, 66% of consumers globally would purchase a dessert from a restaurant more often if there are new options they haven’t tried before, according to data from Chicago-based Technomic. And 48% of consumers globally would order cheesecake — the third most-popular dessert on average in the world — from a restaurant. Finally, 41% of consumers globally would like to see more vegan or dairy-free desserts on restaurant menus.
Editor’s note: This Week in Foodservice was started more than 10 years ago by Jerry Stiegler, a longtime member of the foodservice industry publishing community. Jerry’s regular contributions kept foodservice professionals engaged and in the know for years. Last week, though, for personal reasons Jerry had to step away from writing this blog. We at FE&S thank Jerry for his many contributions over the years and look forward to carrying on this space.
Economic News This Week
- Consumer credit increased 6.8% during the third quarter, per the U.S. Federal Reserve. Revolving credit increased at a rate of 12.9%, while nonrevolving credit increased at an annual rate of 4.9%. In September, consumer credit increased at an annual rate of 6.4%.
- Total nonfarm payroll employment increased by 261,000 in October, per data from the U.S. Bureau of Labor Statistics. This beat previous estimates of 205,000 jobs being added for the month, per published reports. Despite such positive gains, some cracks are starting to emerge in the country’s employment picture. The unemployment rate hit 3.7%, 0.2% increase. Notable job gains occurred in health care, professional and technical services, and manufacturing.
- Labor productivity increased 0.3% in the third quarter of 2022, per data from the U.S. Bureau of Labor Statistics. Output increased 2.8% and hours worked increased 2.4%. From the same quarter a year ago, nonfarm business sector labor productivity decreased 1.4%, reflecting a 1.9% increase in output and a 3.4% increase in hours worked. The 1.4% four-quarter decline is the first instance of three consecutive declines in this measure since 1982.
- Economic activity in the services sector grew in October for the 29th month in a row, per the ISM Report on Business. The Services PMI came in at 54.4% for the month, which is 2.3 points less than September. This marks the lowest reading since May 2020, when the index registered 45.2%, per the ISM. The Business Activity Index hit 55.7%, a 3.4% decrease from September. The New Orders Index hit 56.5%, 4.1% less than September. A total of 16 industries reported growth.
- New orders for manufactured goods totaled $551.0 billion, an increase of 0.3% for September, per data from the U.S. Census Bureau. Factory orders have increased 11 of the past 12 months. And the September increase came on the heels of a 0.2% August increase. Shipments, up eighteen of the last nineteen months, increased 0.2%. This follows a 0.7% August increase. Unfilled orders increased 0.5%.
- Inflation will even have a seat at the table for Americans’ Thanksgiving dinners, per an article from The Food Institute. Projections indicate the average Thanksgiving meal will be 13.7% greater than last year. In other words, the average Thanksgiving dinner will be roughly $60 in 2022 compared to $53.31 in 2021. The cost of pies is expected to be up 19.6% and side dishes up 18.8%. Other proteins are up 9.7%.
Foodservice News This Week
- Eating and drinking places added a net 6,000 jobs in October, per the U.S. Bureau of Labor Statistics. That marked the continuation of an up-and-down pattern in recent months, as noted by the National Restaurant Association. An increase of 69,000 jobs in September was sandwiched between modest gains of just 6,000 jobs in both August and October. Despite the uneven month-to-month gains, the trendline continues to move in a positive direction. October represented the 22nd consecutive month of restaurant employment growth – for a total of nearly 2.1 million jobs. Still, eating and drinking places remain at 565,000 jobs (or 4.6%) less than their pre-pandemic staffing levels. That’s the largest employment deficit among all U.S. industries, per the NRA.
- The National Restaurant Association continues to seek answers about the $180 million from the Restaurant Revitalization Fund that has gone unused. The NRA is working with the original sponsors of the RRF to get answers from the U.S. Small Business Administration, which managed the fund. Last week the four lawmakers sent a letter to the SBA demanding answers about the money and how it will be distributed. “Restaurants are in disbelief that two years after the RRF was officially closed, the program still has roughly $180 million in untapped funds. Washington did the right thing creating the RRF, and now needs to follow through by ensuring that every relief dollar makes it to struggling restaurant owners. There’s more work to be done, and we appreciate the work from Sens. Sinema and Wicker, as well as Reps. Blumenauer and Fitzpatrick,” said Sean Kennedy, executive vice president for Public Affairs, National Restaurant Association.
- In a deal valued at $207 million, MTY Food Group Inc. has acquired Wetzel's Pretzels on a cash and debt-free basis. Upon completion of the deal, Wetzel’s Pretzels will become a wholly owned subsidiary of MTY. The deal is expected to close within the next 30 to 45 days, per a release. Wetzel's Pretzels is a franchisor and operator of quick-service restaurants operating in the snack category. It has a network of more than 350 locations, 90% of which are franchised, across 25 states in the U.S., as well as in Canada and Panama, per an MTY release. During the last 12 months, Wetzel’s Pretzels total network sales have reached approximately $245 million, serving nearly 21 million customers.
- Chili’s opened its first delivery/carryout-only unit, per published reports. This location is near Southern Methodist University in Dallas, Texas. The casual dining chain hopes the 1,600-square-foot-format will extend its reach into dense and untapped markets where diners prefer off-premises service. Chili’s plans to open a second delivery/carryout-only location in Columbus, Ohio. A typical Chili’s restaurant measures 5,500 square feet.
- Jack in the Box plans to sell roughly half of the company-owned Del Taco restaurant locations to existing and new franchisees. This is the next step in Jack in the Box’s “asset light” strategy. Jack in the Box announced its intent to acquire Del Taco in December of 2021 and completed the transaction in March of 2022. Del Taco has approximately 600 restaurants spread across 15 states. That’s not all the news on the Jack in the Box front. As it seeks to triple its number of locations systemwide, Jack in the Box is looking to partner with c-store chains, per a report in Restaurant Dive. The quick-service restaurant chain has more than 90 locations adjacent to c-stores in California and Texas. One reason franchising with c-stores makes sense for Jack in the Box is the chain’s menu offerings. It offers meals across all five dayparts — breakfast, snacking, lunch, dinner and dessert — all day long. Further, the menu and operations at c-store-adjacent Jack in the Box locations won’t be any different than at standalone ones. Every regular Jack in the Box kitchen is at least 1,350 square feet, and kitchens at c-store locations will be as well.
- Robots could potentially replace up to 82% of restaurant positions, per a study from Aaron Allen & Associates. With food, labor and other operating costs continuing to rise, the appeal of robots only continues to grow for many restaurant operators. The company says some estimates indicate robotics can save between 30% and 70% on labor costs for restaurants. Right now, though, the company estimates there is only 1 service robot for every 1,500 restaurants (globally, as of 2022). Expect that to ratio to change, though, as many robots come 0ut of the prototype phase.
- Growth chains: Multiconcept operator FAT Brands inked a development deal to open 80 franchised locations in the state of Texas. Working in partnership with Brame Holdings LLC, the deal calls for the opening of 40 Round Table Pizza restaurants and 40 co-branded Fatburger and Buffalo’s Express locations over the next 10 years. Plans call for the first units to open in 2023. Salad and Go plans to add two more locations within the next month in the Arizona markets of Litchfield Park and Tucson.