Panera underscores the importance of digital sales. A Chicago upstart reimagines grocery foodservice. A pizza chain test drives a “smart saucer.” These stories and more This Week in Foodservice.
The importance of digital sales to today’s restaurant sales cannot be understated. Take Panera Bread, for example.
Panera reports orders placed digitally now account for 50% of the company’s sales systemwide. Further, the company averages more than 3 million transactions weekly via digital means, which include its app, website and in-store kiosks.
This is all from a company that built its brand, in part, through a warm and inviting on-premises experience. Now as a more established brand, Panera continues to vary its format to include smaller designs that work well in urban environments.
Just last week, in fact, Panera took the wraps off an urban format with a footprint that’s 40% smaller than one of its traditional bakery cafes. The urban units will also include updated ordering kiosks, a fully digitized menu and a new tracking screen that provides more detailed order status. Designed with only limited counter seating, the bulk of the bakery cafe is geared toward with the company describes as a “Rapid Pick-Up” experience, with dedicated shelves for pick-up and to-go orders. Panera plans to open one of these units in New York City. (Read on for information about Restaurant Brands International’s approach via a digital food hall.)
Taking all of this a step further is the first New York Panera To Go, which opens next month. Different from the new urban format, Panera To Go offers no dine-in seating, solely serving pick-up and delivery customers.
The two New York bakery cafes are the first of several new Panera bakery cafes planned for expansion in urban markets in the next year, along with a series of non-traditional locations in settings like hospitals and universities.
Economic News This Week
- The Producer Price Index for final demand increased 0.2% in October, per data from the U.S. Bureau of Labor Statistics. This comes after a 0.2% increase in September. The PPI was unchanged in August. Prices for final demand less foods, energy, and trade services advanced 0.2% in October following a 0.3% rise in September. For the 12 months that ended in October, the index for final demand less foods, energy, and trade services increased 5.4%. The index for final demand goods moved up 0.6% in October, the largest advance since a 2.2% rise in June, per the BLS. Most of the October increase can be traced to a 2.7% jump in prices for final demand energy. The index for final demand foods advanced 0.5%. Conversely, prices for final demand goods less foods and energy decreased 0.1%.
- The Consumer Price Index rose 0.4% in October, the same increase as in September, per data from the U.S. Bureau of Labor Statistics. Over the last 12 months, the all-items index increased 7.7%. The index for shelter contributed more than half of the monthly all-items increase, with the indexes for gasoline and food also increasing. The energy index increased 1.8% over the month as the gasoline index and the electricity index rose, but the natural gas index decreased. The food index increased 0.6% from September, with the food at home index rising 0.4%. The index for all items less food and energy rose 0.3%, which is 0.3% less than September’s increase. The all-items index increased 7.7% for the 12 months ending October, the smallest 12-month increase since the period ending January 2022. Overall, these increases were less than what most economists projected and could indicate inflation may have peaked, as discussed in this Reuters article.
- Initial jobless claims increased 7,000 for a total of 225,000 for the week-ending November 5, 2022, per the U.S. Department of Labor. The 4-week moving average was 218,750, a decrease of 250 from the previous week.
- NFIB’s Small Business Optimism Index declined 0.8 points in October to 91.3, which is the 10th consecutive month where the study is less than its 49-year average of 98. Thirty-three percent of owners reported inflation was their single most important problem in operating their business, three points higher than September’s reading. This is also four points less than July’s level, which was the highest reading since the fourth quarter of 1979. Owners expecting better business conditions over the next six months deteriorated two points from September to a net negative 46%. In addition, 46% of owners reported job openings that were hard to fill, unchanged from September. Of those hiring or trying to hire, 90% of owners reported few or no qualified applicants for the positions they were trying to fill. Also, 54% of owners reported capital outlays in the last six months, down two points from September. Of those making expenditures, 37% reported spending on new equipment, 22% acquired vehicles, and 17% improved or expanded facilities. Eleven percent spent money on new fixtures and furniture and 6% acquired new buildings or land for expansion. Twenty-three percent plan capital outlays in the next few months.
- The higher price of diesel could have a ripple effect on the economy. Most predict these higher fuel costs will lead to higher costs for consumers in a variety of areas, most notably food. How did this latest energy crisis come about? During the pandemic, refining slowed which led to lower inventories of diesel. What did not slow, though, was consumer purchasing, both in person and online. As a result, trucking companies had to continue to make deliveries. Given that diesel is used in freight transportation, this shortage has the potential to impact the foodservice industry not only when it comes to food but also in the supply chain’s ability to deliver foodservice equipment and supplies.
Foodservice News This Week
- One Chicago area operator continues to reimagine the grocery store dining experience, per The Food Institute. Dom’s Kitchen just opened a 27,000-square-foot location in Chicago’s Old Town neighborhood. The self-described “next-generation omnichannel local food emporium” offers a variety of made-to-order foodservice options. As one might expect, it includes coffee and pizza options. It also includes burger and sushi concepts. The concept is the brainchild of Bob Mariano, who shook up the Chicago grocery scene years ago with the development of his namesake Mariano’s brand.
- Chip City received a financial boost from a high-profile investor. Danny Meyer, founder of Union Square Hospitality Group and Shake Shack, invested $10 million in the New York City-based cookie concept with 14 units and is poised to franchise, per The Franchise Times. So how did Chip City get on Meyer’s radar? It happened when he and Mark Leavitt, his business partner at Enlightened Hospitality Investments, after a gluten-free Chip City cookie attracted their interest.
- Improved equipment and the ability to turnoff mobile ordering are among the demands Starbucks employees seem to have as unionized workers continue to negotiate with the Seattle-based coffee company, according to a published report from Restaurant Dive. Some employees report not being able to get certain pieces of equipment, like a cold brew machine, fixed in a timely manner. And others have expressed frustration in not being able to turn off mobile ordering without permission from a manager or a district manager when wait times reach 40 minutes for a drink. Other key items Starbucks employees would like to see addressed include the company’s COVID-19 leave policies, fewer out-of-pocket uniform expenses and higher wages.
- Add Restaurant Brands International to the list of operators that have opened digital food halls. Going to market as Kitchens You Love (KYLO) Food Hall allows delivery and walk-in customers to bundle menus into one order from RBI brands such as Popeyes and Burger King. How’s this different from what companies such as Reef have been doing over the past few years? One key difference is the fact that all the brands are owned by the same company, in this case, RBI. That has to simplify things somewhat and it follows the key trend of co-branding units, which many multiconcept operators have been doing of late. Indeed, the ghost kitchen segment shows no sign of slowing down and may grow to $1 trillion in annual revenues by 2030, per Euromonitor.
- Pizza chain Donato’s is testing some back-of-the-house automation in the form of a “smart saucer,” per The Franchise Times. As the name implies, this piece of equipment draws sauce from a reservoir and dispenses it onto a pizza crust. The unit is said to be the size of a shoebox. Technology like this not only helps with labor challenges but can also help operators with food costs through the consistent application of key ingredients.
- The Middleby Corporation added to its portfolio with its acquisition of Escher Mixers, a designer and manufacturer of spiral and planetary mixers for the industrial baking industry. Escher customers include large grocery and retail chains, and the company provides solutions for the artisanal bread and pastry industries. Located in Vicenza, Italy, the company has annual revenues of $15 million, per a company release.
- Growth Chains: Fast-casual restaurant chain The Habit Burger opened a location in Miami, Fla. This location offers dine-in, takeout and drive-thru orders. Curbside pick-up and delivery will be available via The Habit Mobile App and online. Guests will also be able to order via indoor self-serve kiosks and delivery through third parties. The chain also opened locations on the campus of Mission College in Santa Clara, Calif. and in Long Beach, Calif. JINYA Ramen Bar opened a Canadian location in Burnaby, which is near Vancouver. This ramen chain’s development plans call for finishing the year on a strong note with multiple openings, as FE&S sister publication restaurant development + design reports. Little Caesars opened a location in Oklahoma City owned and operated by Air Force veterans and longtime friends Matthew Bulthuis and Ken Sciberras. The ONE Group Hospitality opened an STK Steakhouse in the United Kingdom. The restaurant operates from within The Gantry London, Curio Collection by Hilton property. This marks the third STK restaurant in the London area. Wayback Burgers inked a development deal that will bring 20 to 30 locations to the Quebec market in the coming years.