Are virtual brands at a crossroads? An autonomous pizza vending machine comes to Ohio. A Domino’s franchisee explores modular construction. Menu price increases help keep restaurant sales in growth mode. These stories and more This Week in Foodservice.
What’s the future of virtual brands in the restaurant industry? It depends on who you ask.
Take, for example, Woworks, which already has six concepts in its portfolio, plans to rollout seven virtual brands. These include concepts with menus that focus on soup, sandwiches, toast, bowls, gyros and even mac and cheese. By adding these concepts to existing locations, Woworks hopes to generate additional revenue streams for franchisees.
As Woworks beefs up its virtual brands strategy, Red Robin Gourmet Burgers is getting out of the virtual brands game entirely, per a Restaurant Business report. This includes no longer working high-profile virtual brand Mr. Beast Burger and the virtual brands Red Robin created, such as The Wing Depot. Instead, the CEO says Red Robin plans to focus more on its own concept.
No doubt the pandemic fueled the meteoric rise of virtual restaurant brands, and they still have a place in today’s industry. Still, expect this segment to go through a few twists and turns before hitting maturity.
Foodservice News This Week
- Donatos Pizza plans to open a fully autonomous pizza vending machine in Columbus, Ohio. Working with three other partners, the unit will use foodservice equipment, robotics and data science technologies to serve made-to-order pizzas to customers via a platform that promises to provide “consistent quality, faster service, increased order accuracy, and a seamless digital interaction,” per a release. As part of this process Donato’s will work with its partners “to focus on new technologies for both fully autonomous stand-alone restaurants as well as small prep-bots for existing restaurant kitchens.”
- Add Chipotle to the growing list of companies testing robots. The fast-casual Mexican chain is testing a collaborative robot that cuts, pits, peels and slices avocados for its guacamole, per a USA Today story. Once the machine preps the avocados, a staff member will take over from there, mashing them and adding the other guacamole ingredients. The chain reports it takes about 50 minutes to make a batch of guacamole and it hopes including the robot will shave time off the process.
- Nextstep Commercial Products has acquired the assets of Cedar Creek Cleaning Products. Based in Winchester, Va., Cedar Creek Cleaning Products developed and manufactured cleaning tools in both the commercial and retail markets for more than 65 years, per a release announcing the deal.
- Subway has extended the deadline for organizations that want to submit a bid to acquire the sandwich chain, per a Restaurant Business report. The idea behind extending the sale process is to drive up the price for the chain.
- A Dominos franchisee operating in Oregon plans to open three locations made from modular structures. Franchisee Noble Food Group plans to open the first location by the fourth quarter of 2023 and two more by the second quarter of 2024. The units will feature a “quick-service restaurant” design.
- Foodservice design tools are becoming more multilingual. The last example comes from KCL’s BIM/CAD Designer software which can now be used in English, Spanish, French, and Italian. It shows the growing global influence affecting the foodservice design community.
Economic News This Week
- Advance estimates show U.S. retail and foodservice sales increased 0.2% in June 2023 compared to the previous month, per data from the U.S. Census Bureau. This also represents a 1.5% increase from June of 2022. Total retail sales for the April 2023 through June 2023 period increased 1.6% from the same period a year ago. Closer to home, June sales at eating and drinking places increased 0.1% from May and 8.4% from June 2022. For the period of April 2023 to June 2023, sales at eating and drinking places increased 9% compared to the same timeframe in 2022 and 0.6% compared to January 2023 to March 2023. While restaurant sales have trended in a generally positive direction in recent months, the National Restaurant Association attributes much of that to higher menu prices.
- The Consumer Price Index rose 0.2% in June, per data from the U.S. Bureau of Labor Statistics. This is slowest growth rate in more than two years, per various published reports. Over the last 12 months, the all-items index increased 3.0%. The index for shelter was the largest contributor to the monthly all items increase, accounting for more than 70% of the increase. The food index increased 0.1% in June after increasing 0.2% the previous month. The index for food at home was unchanged over the month while the index for food away from home rose 0.4%. The energy index rose 0.6%.
- The Producer Price Index increased 0.1% in June, per data from the U.S. Bureau of Labor Statistics. This increase was less than 0.2% many economists had projected, which is an encouraging sign for the U.S. economy, per various published reports. Final demand prices declined 0.4% in May and increased 0.1% in April. On an unadjusted basis, the index for final demand advanced 0.1% for the 12 months ended in June. The BLS attributes June’s increase to a 0.2% increase in process for final demand services, noting that prices for goods remained unchanged. The index for final demand less foods, energy, and trade services moved up 0.1% in June after no change in May. For the 12 months ended in June, prices for final demand less foods, energy, and trade services advanced 2.6%.
- Despite showing some signs of improvement, the sentiment among small business owners remains down. NFIB’s Small Business Optimism Index increased 1.6 points in June to 91.0. Despite the growth, the study has spent the past 18 months at less than its 49-year average of 98. Inflation and labor quality are tied as the top small business concerns with 24% of owners reporting each as their single most important problem.
- Initial jobless claims increased by 12,000 for a total of 237,000 for the week-ending July 8, per the U.S. Department of Labor. The 4-week moving average was 246,750, a decrease of 6,750 from the previous week.