What’s all the buzz under the golden arches? Is eating at a casual dining restaurant cheaper than a QSR? Why did a Michigan State professor get a scholarship named after him? We answer these questions and more This Week in Foodservice.

When you were a school-aged child, chances are your mom told you breakfast was the most important meal of the day. Well, it turns out many foodservice operators now agree with mom.

Compared to 2021, not only do more operators offer breakfast and brunch, but more consumers report that they have increased their frequency of purchasing breakfast away from home, per a study of the daypart from Technomic.

“In 2023, breakfast foodservice sales surpassed 2019 sales for the first time,” said Wade Hanson, senior principal at Technomic. “Looking ahead, breakfast foodservice sales are poised to remain on a growth trajectory, while operators will adapt menus to address continued challenges.” The Chicago-based market research firm reports that foodservice breakfast sales were $117.9 billion in 2021, up from $114.3 billion in 2019. 

Other interesting data points from the study include 81% of operators offering breakfast indicating they consider the daypart to be a good opportunity for innovation. And most operators expect to implement a 6% to 10% increase in menu prices in 2024.  Finally, consumers want to see moderate innovation on breakfast menus, such as small twists on familiar morning foods and beverages.

Foodservice News

• McDonald’s has been making headlines for a variety of reasons of late. The company announced Enrique Hernandez will retire from his role as non-executive chairperson of the company’s board of directors, per a company release. Chris Kempczinski will assume the combined role of chief executive officer and chairperson of the board, and Miles White will assume the role of lead independent director. This came as McDonald’s opened its second CosMc’s location, which is a beverage-oriented concept that made plenty of headlines last year. In addition, an ex-McDonald’s chef revealed a secret menu item that includes a mashup of both beef and chicken items, per the New York Post. All of this comes on the heels of the company having to deal with a challenging technology outage.
• Speaking of McDonald’s, is it cheaper to dine there or at Chili’s? It’s a question that has social media all a twitter of late. Thanks to menu price inflation, though, the price difference between the casual dining and quick-service restaurant chains is pretty slim. A Restaurant Business editor took a party of three to Chili’s, where they ordered off the chain’s 3-and-Me menu generating a $39 check. Then they dined at McDonald’s, where the check came in at $36. Yes, McDonald’s offers cheaper options, but this experiment does an excellent job of highlighting why consumers continue to have concerns about what they perceive to be fast-rising fast-food prices.
• Chick-fil-A is the latest fast-food chain to hatch an off-premises-only unit. On March 21, 2024, the chicken chain will open a restaurant in New York City that will cater only to customers who order via its app for pickup or delivery, per a company release. The store’s interior will feature active status board screens allowing customers and delivery drivers to monitor the progress of their orders. What this location will not have is any guest seating. Later this year, the company plans to open what it describes as an elevated drive-thru concept in Atlanta.
• Looking for something to sip on while taking in the April 8 North American Total Solar Eclipse? SONIC has you covered with its latest limited time offer. Available starting March 25, the Blackout Slush Float features cotton candy and dragon fruit flavors topped with white soft-serve ice cream and purple galaxy-themed sprinkles, per a company release. Guests who purchase the Black Out Slush Float will also receive a pair of eclipse viewing glasses.
• The parent company of steak chain STK plans to take a swim in the seafood segment. The One Group, which also owns Kona Grill, plans to open Saltwater Social in Denver during the second quarter of 2024. The company describes its latest venture as a “seafood version of STK,” per a Nation’s Restaurant News story. The news comes just days after One Group opened a STK location in Washington, D.C.
• The CHEERs Act would give restaurants and bars a reason to turn on their taps. H.R. 7577, the “Creating Hospitality Economic Enhancement for Restaurants and Servers Act,” would expand tax incentives for qualifying investments into energy-efficient systems to include keg and tap property, supporting the use of draft lines and keg equipment at restaurants and bars, per ProBrewer. Draft beer sales have not rebounded since the pandemic, per the Brewers Association, but this bipartisan legislation could help turn the tide.
• The Society for Hospitality and Foodservice Management Foundation has launched a scholarship program named after Timothy Mehlberg, a Michigan State University professor. This program recognizes the role Mehlberg has played in the development of the student chapter program, the higher education affiliations, and the overall presence of students with the organization. The scholarship will award $5,000 each to two student members of SHFM on an annual basis.

Economic News

• U.S. retail and foodservice sales increased 0.6% in February 2024 compared to the previous month, per data from the U.S. Census Bureau. This represents a 1.5% increase compared to February of 2023. Total sales for the December 2023 through February 2024 period increased 2.1%. February foodservice sales increased 0.4% from January 2024 and 6.3% compared to February 2023. As seems to be the case of late, this news represents something of a mixed bag. February’s increase comes after a 1.1% January decrease, which is positive. Yet, February came in at 0.2% less than economists had projected, per a Yahoo! Finance Story.
• The Producer Price Index increased 0.6% in February, per data from the U.S. Bureau of Labor Statistics. This is double the Dow Jones estimate, per a CNBC story. On an unadjusted basis, the final demand index advanced 1.6% for the 12 months ended in February, the largest rise since moving up 1.8% for the 12 months ended September 2023. The index for final demand less foods, energy, and trade services increased 0.4% in February after rising 0.6% in January. For the 12 months ended in February, prices for final demand less foods, energy, and trade services moved up 2.8%.
• Industrial production increased 0.1% in February, per data from the U.S. Federal Reserve. This comes after declining 0.5% in January. In February, the output of manufacturing rose 0.8%. At 102.3% of its 2017 average, total industrial production in February was 0.2% less than its year-earlier level. Capacity utilization for the industrial sector remained at 78.3% in February, a rate that is 1.3 percentage points less than its long-run (1972–2023) average.
• Initial jobless claims declined 1,000 for a total of 209,000 for the week ending March 9, 2024, per the U.S. Department of Labor. (The previous week's level was revised down by 7,000 from 217,000 to 210,000.) Economists had projected 218,000 claims for the week, per a Reuters report, which shows the labor market, while softening slightly still remains quite strong. The 4-week moving average was 208,000, a decrease of 500 from the previous week's revised average.
• Privately owned housing permits issued in February were 1.9% greater than in January, per data from the U.S. Census Bureau. It also represents a 2.4% increase compared to February 2023. Single‐family permits increased 1.0% in February compared to January.