Pop culture’s growing influence in foodservice, including the introduction of Cherlato. Another chain takes a drive-thru only unit for a test drive. Can virtual brands be an international growth vehicle? Plus, is a recession near? These stories and more This Week in Foodservice.

As operators lean more into technology, is a battle looming with labor?

Some feel it is inevitable as more operators turn to kiosks, artificial intelligence, robots and other forms of technology to do the jobs humans once performed, as this Spoon article notes.

Others, though, interestingly point out that few operators are staffed at 100%, so the use of various forms of technology such as automation and robotics can only help them make more efficient use of the labor they do have.

Regardless of one’s position on all of this, operators will need to continue to rethink the way they deploy labor as costs increase and the availability of skilled employees continues to fluctuate.

A Barbie pop-up is located in Chicago's West Loop neighborhood. Image courtesy of Chicago Bucket List, Instagram

Foodservice News This Week

• Are pop culture pop-ups the latest foodservice trend? Perhaps. The organizers of a Malibu Barbie pop up in Chicago’s trendy West Loop neighborhood have extended the run of their operation through mid-October just as the Barbie movie was set to make its national debut on July 21, Eater reports. This comes on the heels of successful pop-up restaurants in Chicago celebrating hit television shows Saved by the Bell and The Golden Girls. And in Seattle, a series of pop-up bars commemorating pop singer Taylor Swift’s Eras Tour have emerged, with each one marking a specific period from the singer’s celebrated past. It seems consumers appetite for all things nostalgia remains far from satiated.
• Staying on the pop culture beat for a second, singer and actress Cher plans to launch her own gelato company, Food and Wine reports. Known as Cherlato, this endeavor was five years in the making. Per Cher’s Instagram post announcing this venture it would appear Cherlato will work from a food truck that sports her likeness licking an ice cream cone. The news got some of Cher’s fans to have a little fun speculating on potential flavors based on some of her hit songs, including ‘If I Could Turn Back Lime.”
• Add Chick-fil-A to the growing list of operators testing drive thru only restaurants. The chicken chain will open its first drive-thru-only unit on July 27 in Hawaii, per a company release. The dual lane drive-thru unit will also include three walk-up windows that will allow guests to place their carryout orders with staff. As is the case with its existing Chick-fil-A drive-thru operations, guests will place their orders with team members armed with computer tablets. Chick-fil-A worked with a clothing provider to design cooling vests and moisture-wicking uniforms.
• Can virtual brands serve as an international growth vehicle for some chains? Multiconcept operator Dine Brands plans to find out. The company plans to roll out its Applebees and IHOP chains in Japan, Belgium, France and The Netherlands through a partnership with Franklin Junction, which will pair the brands with host kitchens that will sell their food for delivery only, per a Restaurant Business report. Dine Brands expects to open its first location through this deal in Japan during the fourth quarter of 2023.
• Iconic Japanese steakhouse chain Benihana may be for sale, per a FSR Magazine story. Private equity chain Angelo Gordon purchased Benihana in 2012 for $296 million and some current estimates value the chain at $600 million. The chain has more than 100 units systemwide and it also operates the RA Sushi and Samura chains. Despite the pending sale, the chain continues to add units. In June, for example, Benihana opened a restaurant in Conroe, Texas, its fifth in the Houston market.
• The fondue is not the only thing heating up for The Melting Pot. Through June of this year, the chain had reopened 30 remodeled restaurants and it plans to have a total of 60 remodeled restaurants opened by the end of 2023, per a company release. Not surprisingly, a spokesperson for the chain says the remodeled restaurants continue to lead to higher guest counts and sales.

Economic News This Week

• Is a recession getting nearer? For the 15th consecutive month, the Conference Board’s Leading Economic Index declined in June. The 0.7% dip follows a 0.6% decline in May. The Conference Board attributes the decline to a variety of factors including gloomier consumer expectations, weaker new orders, an increased number of initial claims for unemployment, and a reduction in housing construction. For the six-month period spanning December 2022 to June 2023, the LEI declined 4.2%, which is 0.4% faster than the previous six months. This has led many economists to believe a recession is on the horizon. “We forecast that the US economy is likely to be in recession from Q3 2023 to Q1 2024. Elevated prices, tighter monetary policy, harder-to-get credit, and reduced government spending are poised to dampen economic growth further,” said Justyna Zabinska-La Monica, senior manager, business cycle indicators, at The Conference Board.
• Despite the prospect of a looming recession, consumer confidence actually improved in July, per the Conference Board. The organization’s Consumer Confidence Index rose 6.9% in July for a reading of 117.0. The Present Situation Index based on consumers’ assessment of current business and labor market conditions, improved to 160.0 from 155.3 last month. The Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, improved to 88.3 from 80.0 in June. Importantly, Expectations climbed well above 80 — the level that historically signals a recession within the next year. Despite rising interest rates, consumers are more upbeat, likely reflecting lower inflation and a tight labor market. Although consumers are less convinced of a recession ahead, we still anticipate one likely before yearend.
• Rising interest rates continue to impact the housing market. Permits issued for privately‐owned housing units decreased 3.7% in June from the previous months, per data from the U.S. Census Bureau. Compared to June 2022, this represents a 15.3% decline. There was some good news, though, as June single‐family permits were 2.2% greater than in May. In terms of housing starts, June saw an 8% decline compared to May and an 8.1% decline from June of 2022.
• Existing-home sales dropped 3.3% in June, per the National Association of Realtors. Sales declined by 18.9% from one year ago. At $410,200, the median existing-home sales price for June was the second-highest price ever recorded. And the inventory of unsold homes stands at 3.1 months’ supply at the current pace, which is unchanged from May.
• Initial jobless claims decreased by 9,000 for the week ending July 15, per the U.S. Department of Labor. The 4-week moving average was 237,500, a decrease of 9,250 from the previous week.