FAT Brands opens its first tri-branded unit. Challenging business conditions do not dampen restaurant operators’ spending plans. New owners for Swig. Jack in the Box has a healthy appetite for growth. These stories and more This Week in Foodservice.
Restaurant industry performance held steady in September, per the latest from the National Restaurant Association’s Restaurant Performance Index. The September RPI came in at 101.0, up 0.2 from August.
Current situation indicators were a mixed bag in September, with restaurant operators reporting a net increase in same-store sales but a continued decline in customer traffic. Looking forward, restaurant operators remain pessimistic about the direction of the overall economy. The current situation index rose 0.6% to 101.5 in September while the expectations index declined 0.4% to 100.6.
Despite the uncertainty about business conditions, a majority of operators are still planning for capital expenditures. In fact, 63% of operators said they plan to make a capital expenditure for equipment, expansion or remodeling during the next 6 months. This marks the 20th consecutive month with a reading of at least 55%, per the NRA.
Foodservice News This Week
- FAT Brands opened its first tri-branded location which includes its Fatburger, Buffalo’s Express and Hot Dog on a Stick concepts. Situated in the Los Angeles neighborhood of Valley Village, the restaurant offers a menu of custom-built burgers, fries, fresh, chicken wings and savory hot dog on a stick. Until now, the multiconcept operator’s development plans have focused mainly on developing co-branded units that include Fatburger and Buffalo’s Express.
- The Small Business Administration finally released the $83 million dollars in unobligated Restaurant Revitalization Fund (RRF) grants to 169 operators with pending applications. The news, however, was greeted with mixed reviews. “The SBA’s action represents the final chapter of our nearly three-year effort to secure dedicated federal pandemic relief dollars for local restaurants. Today’s announcement is great news for those 169 operators fortunate enough to receive an RRF grant, but hundreds of thousands more are struggling with uncertainty,” said Sean Kennedy, executive vice president of public affairs for the NRA. According to the SBA, the grants are being released to operators in the order their applications were received.
- Utah-based Larry Miller Company has acquired a majority stake in beverage chain Swig. LHM developed its interest in Swig from Savory Fund, a private equity firm focused on emerging food and beverage concepts. Savory Fund, Swig founder Nicole Tanner, and partners Chase Wardrop and Dylan Roeder will each retain minority stakes in the business. CEO Rian McCartan will continue to lead Swig’s daily operations. Savory Fund purchased Swig in 2018. Swig, which offers a variety of customized drinks and treats, will reach 46 locations by the end of 2022 and has more than 25 corporate locations scheduled to open in 2023, per a company release.
- Unit growth is on the menu at Jack in the Box for 2023. And the chain’s confident it won’t be a limited-time offer. Jack in the Box expects positive net unit growth in the coming year and plans to enter new markets: Salt Lake City and Louisville. If this comes to fruition, it will be the first time since 2019 that Jack in the Box would have positive net unit growth, per a company release. Jack in the Box CEO Darin Harris attributes this rosy outlook in part to “rebuilding franchisee relationships, and pairing franchise and company resources.”
- Dave Flitman will Rosemont, Ill, -based US Foods as CEO, effective Jan. 5. Flitman’s no stranger to the foodservice industry, having served as president and CEO of Performance Foodservice, part of Performance Food Group, from 2015 to 2018. His background also includes serving as president and CEO of Builders FirstSource, a U.S. supplier of building products, prefabricated components and value-added services. He was president and CEO at BMC Stock Holdings prior to the merger of the two companies. Andrew Iacobucci, Interim CEO, will continue to lead US Foods until Flitman joins the company. The move comes weeks after US Foods introduced Moxe, its latest customer app.
- NSF promoted Samuel Cole to director of product certification - equipment and chemical evaluation in its Global Food Division. Cole leads NSF’s nonfood certification and evaluation teams which seek to prevent foodborne illness by certifying and registering commercial and processing food service equipment, food contact materials, and nonfood compounds, including lubricants, greases and other chemicals used in and around food processing areas. Cole joined NSF in 2015.
Economic News This Week
- Consumer confidence took a hit yet again in November, per the latest data from The Conference Board. The November Consumer Confidence Index came in at 100.2, down from 102.2 in October. The present situation index, which is consumers’ assessment of current business and labor market conditions, decreased to 137.4 from 138.7 last month. The expectations index — measuring consumers’ short-term outlook for income, business, and labor market conditions — declined to 75.4 from 77.9. “Inflation expectations increased to their highest level since July, with both gas and food prices as the main culprits. Intentions to purchase homes, automobiles, and big-ticket appliances all cooled,” said Lynn Franco, senior director of economic indicators at The Conference Board. “The combination of inflation and interest rate hikes will continue to pose challenges to confidence and economic growth into early 2023.”
- Consumer sentiment took a dip in October, per the latest data from the University of Michigan. Consumer sentiment came in at 56.8% for October, down 3.1% from September. On a year-over-year basis, consumer sentiment has declined 15.7%. In outlining some of the reasons for consumers’ dampened outlook the study cited inflation, rising borrowing costs, declining asset values and weakening labor market expectations. Speaking of the labor market…
- Initial jobless claims totaled 240,000, an increase of 17,000 for the week ending November 19, per the U.S. Department of Labor. The 4-week moving average was 226,750, an increase of 5,500 from the previous week.
- New orders for manufactured durable goods in October totaled $277.4 billion in October, an increase of 1%, per the U.S. Census Bureau. This comes on the heels of a 0.3% September increase. Overall, durable goods orders have increased in seven of the past eight months. Shipments of manufactured durable goods increased 0.4% in October and have been up 17 of the past 18 months.
- Sales of new single‐family houses totaled 632, 000 in October, per data from the U.S. Census Bureau and the Department of Housing and Urban Development. As often seems to be the case these days, this result represents a mixed back of results. October’s sales represent a 7.5% increase compared to September but is 5.8% less than October 2021.