Layers of labor issues abound. A new multiconcept operator forms a fast-casual portfolio. Making a go of it with grab and go. These stories and more This Week in Foodservice.
It’s no secret that labor remains a hot button issue for the restaurant industry. Despite adding jobs for 24 consecutive months, per the National Restaurant Association, industry employment remains 3.6% less than it was prior to the pandemic. Furthermore, I continue to hear operators say the labor they continue to add is not as skilled as it once was.
That lack of labor and lower skill level will undoubtedly lead to greater reliance on more speed-scratch food items and operators showing greater interest in foodservice equipment that’s easier to operate and maintain. And it may even pave the way for greater use of the connectivity features most equipment possesses.
But there’s more on the labor front than that. There’s plenty happening on the legislative front, too.
Virginia is the latest state to introduce legislation to regulate wages and working conditions for fast-food workers. HB 2478 would impact any fast-food chain with more than 100 restaurants nationwide. If this sounds somewhat familiar, it should. Virginia’s legislation is similar to California’s FAST Recovery Act, which got put on hold pending a vote in November 2024, Restaurant Dive reports.
In a political win for the fast-food industry, the referendum initiative challenging California’s fast food council law, also known as The FAST Act reached the required number of verified signatures. This delays the implementation of the law until after California’s next statewide election, which is scheduled for November 2024, unless another process triggers a special election prior to that. A California judge previously blocked attempts to enforce the law while the secretary of state verified petition signatures.
The FAST Act would create an unelected council to regulate national quick service chain operations. The 10-member body would oversee wages, training, and health and safety standards. These changes would increase prices at quick service restaurants by 20% to 22%, per the National Restaurant Association, and ultimately slow business growth.
Looking for some good news on the labor front? Turn to Chipotle, which plans to hire 15,000 workers. The fast-casual giant’s hiring spree runs counter to the plans other high-profile companies have. Given that tech companies Google, Meta and Microsoft announced layoffs in recent days, as did Amazon, Chipotle’s plans standout all the more. And some have wondered openly whether Chipotle’s hiring plans represent a harbinger of things to come for the restaurant industry, which the U.S. Bureau of Labor Statistics projects to be one of the fastest growing business segments between now and 2031. Of course, that’s provided the industry can find people to fill those roles.
Stay tuned as it would seem the industry is poised to work through myriad labor issues this year and beyond.
This Week in Foodservice
- A familiar name is leading a new fast-casual restaurant company. Craveworthy include three existing concepts, Wing It On!, Krafted Burger + Tap and The Budlong Hot Chicken, and one new brand, The Lucky Cat Poke Company. Initial stores will include 6 company-owned locations and 13 franchise locations with an additional 18 franchise locations in various stages of development. The Lucky Cat Poke Company expects to launch its first standalone location along with approximately fifty ghost kitchen locations in 2023. Serving as CEO of Craveworthy is Gregg Majewski, former CEO of Jimmy John’s. Craveworthy is owned by FG Financial Group.
- With consumers’ cravings for convenience as healthy as ever, the need for a well-designed grab and go offering has never been more important. When fine-dining restaurants get in on the grab and go action you know this trend has big staying power. This restaurant development + design article explores the key ingredients that make any grab and go operation successful.
- Some food delivery drivers apparently know no bounds. That was the case during a college basketball game between the Loyola Ramblers and Duquesne Dukes on January 25, 2023. During the game a driver from a third-party delivery firm wandered on to the basketball court to make a food delivery. Interestingly enough, the officials did not stop play despite someone wandering on to the floor. A couple days after the event, the Duquesne media relations team confirmed the delivery was a prank, per published reports.
- Congrats to all of the restaurants and chefs named semifinalists for the 2023 James Beard Foundation awards. The awards recognize restaurants and chefs across 23 categories, with the winners announced June 5, 2023, in Chicago.
- Growth Chains: Dickey’s Barbecue Pit will open its first location in the Philippines during the second quarter of 2023. Mountain Mike’s opened a restaurant in Delano, Calif.
Economic News This Week
- Personal income increased 0.2% in December, according to the U.S. Bureau of Economic Analysis. Disposable personal income increased 0.3% while personal consumption expenditures decreased 0.2%. The PCE price index increased 0.1%. Excluding food and energy, the PCE price index increased 0.3%. Real DPI increased 0.2% in December and Real PCE decreased 0.3%.
- Real gross domestic product increased 2.9% in the fourth quarter of 2022, per the advance estimate released by the U.S. Bureau of Economic Analysis. This beat some economists’ estimates by .3%, per published reports. In other words, the U.S. economy closed 2022 with a little more momentum than anticipated but many economists believe a recession will still come, just later in the year.
- Initial jobless claims fell 6,000 for a total of 186,000 for the week-ending January 21, 2023, per the U.S. Department of Labor. The 4-week moving average was 197,500, a decrease of 9,250 from the previous week. This represents the lowest number of claims since April of 2022, per published reports and all signs point to a still tight labor market. This lower number of claims came on the heels of layoffs from a variety of tech giants, including Google, Meta and Microsoft.
- Sales of new single‐family houses increased 2.3% in December 2022 when compared to the previous month, per data from the U.S. Census Bureau. This marks the third consecutive month-over-month sales increase when it comes to new homes. Compared to December of 2021, though, new home sales declined 26.6%. An estimated 644,000 new homes were sold in 2022, which is 16.4% less than 2021.
- New orders for manufactured durable goods increased 5.6% in December, per the U.S. Census Bureau. This followed a 1.7% November decrease. Excluding transportation, new orders decreased 0.1%. Excluding defense, new orders increased 6.3%. Transportation equipment, up four of the last five months, drove the increase due to growing by 16.7%.
- Pending home sales increased in December for the first time since May 2022, per the National Association of Realtors. The Pending Home Sales Index — a forward-looking indicator of home sales based on contract signings — improved 2.5% to 76.9 in December. Year-over-year, pending transactions dropped by 33.8%. An index of 100 is equal to the level of contract activity in 2001. “This recent low point in home sales activity is likely over,” said NAR Chief Economist Lawrence Yun. “Mortgage rates are the dominant factor driving home sales, and recent declines in rates are clearly helping to stabilize the market.”