Consumer confidence takes a hit. Unions seek a caffeine jolt in their latest organizing efforts. It’s lights out for one celebrity chef in Las Vegas. One chain tests reusable cups while another puts its menu on a diet. These stories and more This Week in Foodservice.
Consumer confidence took a hit in August, per data from The Conference Board. After posting back-to-back increases in June and July, the Consumer Confidence Index totaled 106.1 in August, a 7.9-point decline from July.
The Present Situation Index fell to 144.8 from 153.0. The Expectations Index totaled 80.2 in August, a 7.8-point decline from July. It’s important to note that expectations remain slightly greater than 80, which is the level that historically signals a recession within the next year, per The Conference Board.
And although consumer fears of an impending recession continued to recede, The Conference Board still anticipates one is likely before year-end.
“Write-in responses showed that consumers were once again preoccupied with rising prices in general, and for groceries and gasoline in particular,” said Dana Peterson, chief economist at The Conference Board. The pullback in consumer confidence was evident across all age groups — and most notable among consumers with household incomes of $100,000 or more, as well as those earning less than $50,000. Confidence held relatively steady for consumers with incomes between $50,000 and $99,999.”
Foodservice News This Week
- After a brief dip into contraction mode, the restaurant industry returned to expansion in June, per the National Restaurant Association’s Restaurant Performance Index. The RPI increased 0.6% for a reading of 100.2. (Any reading greater than 100 means the industry is in expansion.) The news was not all good, though. Restaurants reported negative consumer traffic readings, which meant the Current Situation Index remained unchanged at 99.7 in June. Restaurant operators’ outlook for sales growth improved somewhat in July, with 39% expecting revenues to increase in 6 months. That’s a 10% increase from the previous month.
- Is modular the future of restaurant design and construction? One CEO thinks so. Maria Riveria, CEO of Smalls Sliders, says the chain is leveraging 800-square-foot modular shipping container units manufactured elsewhere and then shipped to their location, per a Nation’s Restaurant News story. Once a plot is prepared, Smalls can open a restaurant on top of it in as little as eight weeks. It takes less than a half hour to get the restaurant from the truck to be fully built.
- Panera’s menu has gone on a diet. The fast-casual chain continues to test a streamlined version of its menu at some of its bakery cafes, Restaurant Business reports, in an effort to provide “guests with a faster and more convenient experience while also simplifying operations for our associates.” The chain did not indicate how many items it was cutting as part of this test, but a Reddit post shows a list of 50 items that could disappear, including flatbread pizzas and other hot items. This test has led some industry observers to wonder if Panera plans to cut back on its dinner daypart, as this Restaurant Dive story notes.
- Starbucks launched a reusable cup test in 12 of its coffee shops in Napa and Petaluma, Calif. From August 14 through October 22, customers at participating stores can bring their own personal cup to the cafe or drive-thru, be offered a Borrow A Cup from Starbucks, or choose For Here Ware, a reusable ceramic or glass cup for customers who opt to sit and stay in cafe, per a company announcement. To help facilitate the cup collection process, Starbucks reclaims the reusable cups. And if customers bring in their own reusable cups, they will also receive the standard 10-cent discount the chain offers. Since May, Starbucks has been conducting a 100% reusables test at participating ASU campus stores and every customer who brings in their own personal reusable cup or reuse a Borrow a Cup from a previous visit can receive a $1 discount on their beverage order.
- The latest round in the ongoing battle of Starbucks vs. the union goes to the Seattle-based coffee company. That’s due to the fact that crew members at Starbucks Roastery location on Chicago’s Magnificent Mile voted 119 to 90 in favor of not becoming part of the Service Employees Union International, the Chicago Sun-Times reported. Given this is Starbucks’ largest location systemwide, the outcome is seen as a significant blow to the SEIU’s attempt to unionize the coffee company. Don’t expect SEIU to take this loss lying down, though. The union has filed charges of unfair labor practices with the National Labor Relations Board, the story adds.
- Starbucks is not the only purveyor of coffee and pastries to face unionization. It has company in Dunkin’. Workers at a Dunkin’ restaurant in Cincinnati filed for a union election, Restaurant Dive reports. While Starbucks’ challenges come from the SEIU, as noted above, the move to organize at this Dunkin’ location comes from the Bakery, Confectionery, Tobacco Workers and Grain Millers’ International Union. The push is the first union drive to reach the petition stage at Dunkin’ in more than 12 years, the story adds. In 2011, a union drive at a Merrick, N.Y., Dunkin’ failed.
- They say your luck changes pretty quickly in Las Vegas and one high-profile chef found that out the hard way. Just five months after it opened, M.Y. Asia closed its doors, Eater reports. The 5,300-square-foot restaurant operated from inside the Horseshoe Casino and was led by celebrity chef Martin Yan and the ATM Hospitality Group. The space, which had previously housed a Mexican-themed concept, had undergone a significant renovation and featured an open kitchen. This provides yet another example of how complicated today’s operating environment can be.
- The National Restaurant Association has released a restaurant-specific guide to help operators evaluate their risks and create a fire response plan. Always Read: Fire includes best practices from official sources and restaurant operators—including human resources and risk managers from independent restaurants and national brands—to share recommendations for what to do in advance of, during and after a fire occurs.
Economic News This Week
- Existing home sales dropped 3.3% in June, per the National Association of Realtors. This represents an 18.9% decline from one year ago. At $410,200, the median existing-home sales price for June was the second-highest price ever recorded – since January 1999 when NAR began tracking the data – and 0.9% less than the all-time high from one year ago of $413,800.
- Sales of new single‐family houses in July 2023 increased 4.4% compared to June, per data from the U.S. Census Bureau and the Department of Housing and Urban Development. This also represents a 31.5% increase compared to July 2022. The seasonally adjusted estimate of new houses for sale at the end of July was 437,000, which represents a supply of 7.3 months at the current sales rate.
- Initial jobless claims declined by 10,000, totaling 230,000 for the week ending August 19, 2023, per the U.S. Department of Labor. The 4-week moving average was 236,750, an increase of 2,250 from the previous week.
- The number of job openings edged down to 8.8 million on the last business day of July, per data from the U.S. Bureau of Labor Statistics. This represents a decline from June’s total of 9.16 million and it beat the expectations of various economists, which projected the total to come in at 9.46 million, per published reports. The number of hires and total separations changed little at 5.8 million and 5.5 million, respectively. Within separations, quits (3.5 million) decreased, while layoffs and discharges (1.6 million) changed little.
- New orders for manufactured durable goods decreased 5.2% in July, per data from the U.S. Census Bureau. This snapped a streak of four consecutive monthly increases. Excluding transportation, new orders increased 0.5%. Excluding defense, new orders decreased 5.4%. Despite missing many economists' projections, news of this decline did not surprise many as Baron’s reports.