Starbucks' sustainability efforts take the next steps. Rising labor costs force restaurants to react. Seventeen restaurant chains were lauded for their smart growth. AmerCareRoyal, Easy Ice and the Legacy Companies complete acquisitions. Plus, the jobs market holds steady.

Starbucks is taking its reusable cup initiative to the next level. Customers at participating Starbucks locations can now use their personal cups when ordering in the café, in the drive-thru or when ordering ahead with the Starbucks app.

Customers at participating Starbucks locations can now use their personal cups when ordering in the café, in the drive-thru or when ordering ahead with the Starbucks app.Reusable cups have become more common among guests who order their beverages inside a Starbucks location. When placing an order, a guest tells the barista they brought their own personal cup and hand it to the crew member. Customers who opt to consume their beverage on-premises can also request a reusable ceramic or glass cup at most stores, the chain notes.

Drive-thru customers now order their beverages as usual, and let the barista know they brought their own cups. At the pickup window, baristas will collect customers’ personal cups without the lid using a contactless vessel to ensure hygiene and safety, the company notes. The beverage will be returned the same way. When customers order via the Starbucks app, first they will hit the “customization” button and then select “personal cup” in the customization menu and continue ordering as normal. When they get to the store, customers communicate with the barista at the pickup area and hand over their clean personal cup without the lid. The barista will hand the beverage back in a contactless vessel.

The company says this initiative supports its sustainability efforts by reducing post-consumer waste. This effort builds off what Starbucks describes as a “successful personal cup test at 200 drive-thru stores across Colorado” last spring. Starbucks store partners informed and helped co-design the custom reusable cup smallware all stores will now use to transfer orders to personal cups. “As long as we are following all our procedures and steps, it doesn’t add any more time, and it is actually making customers happier,” one Starbucks partner who worked at a store that participated in the Colorado test. “This has been a really big hit.”

Foodservice News This Week

• It may be a new year, but operators continue to wrestle with the same old labor pressures. A total of 22 states and 70 local jurisdictions have raised minimum wages that restaurant operators and other businesses will have to pay, per a Restaurant Business report. Just how much the minimum wage will rise will vary by location and other factors. The impact of rising labor and food costs continues to ripple throughout the industry. Some chains have preemptively hiked their prices to offset these rising costs, as this Retail Wire story And up to 1,200 Pizza Hut delivery drivers could be out of work in California as multiple franchisees in the state prepare to eliminate these positions, per various published reports.
• The restaurant industry returned to expansion mode in November, per the National Restaurant Association’s Restaurant Performance Index. The monthly composite index grew 0.5%, hitting 100.1. And any reading greater than 100 indicates the industry is in expansion mode.
• Seventeen restaurant chains made Franchise Times’ list of the 40 smartest-growing brands. Also known as the Fast & Furious list, this study highlights 40 franchised businesses with sustainable growth. Restaurant chains cracking the upper half of the list include Scooter’s Coffee (2), Bubbakoo’s Burritos (10), Slim Chickens (11), Jeremiah’s Italian Ice (15), Huckleberry’s (17) and Ziggi’s Coffee (18).
• The Big Biscuit purchased the chain’s two original restaurants from the Gerson family. Dan Gerson, who founded The Big Biscuit, passed away unexpectedly in September. “My family and I made the difficult decision to close the Independence and Blue Springs locations after my father's passing,” said Luke Gerson. The units have been closed since November, but The Big Biscuit expects to reopen them soon. The Big Biscuit has 25 restaurants throughout Kansas, Missouri, and Oklahoma.
• TGI Fridays took two key steps to reshape its system. The iconic casual dining chain sold eight corporate-owned restaurants in the Northeast to former CEO Ray Blanchette and it plans to close what the company describes as “36 underperforming locations” across various markets, per a release. These changes come as the chain continues to overhaul its menu and on the heels of several leadership changes that occurred during the fourth quarter.
• AmerCareRoyal, which provides disposable foodservice supplies, has acquired Thermosource Tooling and Manufacturing. Headquartered in El Segundo, Calif., TTM supplies thermoformed and flexible packaging solutions for foodservice, food production, and grocery applications. Terms of the deal were not disclosed. ACR is backed by HCI Equity Partners, a private equity firm active in the foodservice industry. HCI also owns an equity position in service agent Tech24, which has been growing via acquisition in recent years.
• Easy Ice expanded its reach in the Southeastern U.S. via two acquisitions. The commercial ice machine rental company bought Southwest Refrigeration in Florida, and the Leasing Division of Roxboro Refrigeration in North Carolina.
• The Legacy Companies expanded its product portfolio. The company purchased the electric kitchen countertop appliance product line and the non-electric kitchen smallwares and utensils product line of Team International Group of America, which does business as Kalorik. Terms of the asset purchase transaction were not disclosed.
• Growth Chains: Cousins Subs opened a location in Sun Prairie, Wis. The 1,900 square-foot restaurant has a full-service drive-thru and seating for 28 guests. Pizza Inn will open two locations in Saudi Arabia this month. This is part of a larger development agreement to bring 50 units to Saudi Arabia in the coming years. Round Table Pizza inked development deals that will 10 franchised units to Oklahoma and six franchised units to Arkansas over the next six years. STK Steakhouse opened a company-owned location in Salt Lake City, the chain’s first restaurant in Utah. Vicious Biscuit inked a three-unit development deal that will bring the burgeoning breakfast concept to Mississippi in the Hattiesburg and Jackson markets. The fast-casual chain also has a development deal in place to bring six units to Ohio. The first Ohio unit will open in Montrose.

Economic News

• The U.S. economy added 216,000 positions in December, and the unemployment rate was unchanged at 3.7%, per data from the U.S. Bureau of Labor Statistics. This was greater than the 173,000 positions added in November and more than the 175,000 some economists had projected, per a Yahoo! Finance story. Eating and drinking places added a net 22,100 jobs in December, per a report from The National Restaurant Association. During the second half of 2023, eating and drinking place payrolls rose by 102,000 jobs, compared to 196,000 jobs added during the first half of the year. Despite the slowdown, the addition of nearly 300,000 jobs during 2023 was greater than 2019’s increase of 246,000 jobs.
• Private sector employment increased by 164,000 jobs in December and annual pay was up 5.4 % year-over-year, according to the December ADP National Employment Report. The leisure and hospitality sector led the way by adding 59,000 positions. By adding 24,000 positions, construction held strong in the face of high-interest rates, but manufacturing continued to struggle, seeing positions decline by 13,000.
• Initial jobless claims declined by 18,000 for the week-ending December 30, 2023, per the U.S. Department of Labor. That brought the weekly total to 202,000. The 4-week moving average was 207,750, a decrease of 4,750 from the previous week.
• U.S.-based employers announced 34,817 cuts in December, down 24% from November, per data from Challenger, Gray & Christmas, Inc. November was the second lowest monthly total in 2023 after the 23,697 job cuts announced in July. December’s total also represents a 20% decline from the same month in 2022. In the fourth quarter, companies announced plans to cut 117,163 jobs, down 20% from the third quarter and down 24% from the final quarter of 2022.
• The number of job openings totaled 8.8 million on the last business day of November, per the U.S. Bureau of Labor Statistics Job Openings and Labor Turnover Survey. (In October, the number of openings totaled 8.7 million.) November represented the lowest level of job openings since 2021, per various published reports.
• In November, consumer credit increased at a seasonally adjusted annual rate of 5.7%, per the U.S. Federal Reserve. Revolving credit increased at an annual rate of 17.7%, while nonrevolving credit increased at an annual rate of 1.5%. This represents the first time U.S. consumer credit exceeded $5 trillion, per various published reports.
• Despite showing modest improvement, economic activity remained in contraction mode in December, per the Manufacturing ISM Report On Business.
• Manufacturing PMI totaled 47.4% in December, up 0.7% from the previous month. A reading of more than 48.7% indicates expansion. In contrast, economic activity in the services sector expanded for the 12th consecutive month, per the Services ISM Report On Business.
• Despite posting a 1.3-point increase to 91.9, the NFIB Small Business Optimism Index remained below its 50-year average of 98 in December. Twenty-three percent of small business owners reported that inflation was their single most important problem in operating their business, up one point from last month, and replacing labor quality as the top concern. “Inflation and labor quality have consistently been a tough complication for small business owners, and they are not convinced that it will get better in 2024,” said Bill Dunkelberg, NFIB’s chief economist.