This Week In Foodservice

The editorial team aggregates key industry information and provides brief analysis to help foodservice professionals navigate the data.


Operators Respond as Consumers Reach a Tipping Point

Learn how companies are using virtual brands and digital channels to drive growth. A tech titan tries his hands at running a restaurant. Again. Plus, there’s some cool news from Easy Ice and Polar Leasing. These stories and more This Week in Foodservice.

Have consumers finally reached their breaking point? Perhaps.

The Conference Board reported consumer confidence declined in April for the third consecutive month. Dominating consumer concerns were “elevated price levels, especially food and gas,” said a Conference Board spokesperson, who added that “politics and global conflicts” were distant runners-up. When asked where they might consider cutting back, purchases in areas such as food away from home, clothing/fashion items, entertainment away from home and vacations were the top responses, per The Conference Board.

As a result, restaurant chains may have to offer additional discounts or increase their emphasis on tried and true value meals to help spark customer traffic, Reuters reports. The story notes Domino’s Pizza and multiconcept operator Restaurant Brands International say their sales increased in their most recent quarters due to their loyalty programs and increased promotions.

McDonald’s has reported slowing sales for four straight quarters, which may lead to some changes for the burger giant. For example, the company will test bigger burger patties this year to gauge customers’ appetites for something a little more filling, as Bloomberg notes.

But can too much menu innovation result in a chain losing focus? Over the weekend, former Starbucks CEO says the company needs to focus more on the experience in its stores and the chain’s coffee drinks, as the Associated Press reports. This came after Starbucks reported a 2% decline in revenue for its most recent fiscal quarter and lowered its earnings guidance for the year. Schultz’s remarks come after current CEO Laxman Narashimhan said the chain plans to release several new products to drive traffic, including boba drinks, sugar-free options, and an energy beverage.

Foodservice News This Week

  • Craveworthy Brands has added an Indian concept to its portfolio by acquiring Sigri Indian BBQ. It’s been a busy year or so for Craveworthy Brands. The company also introduced several new concepts, including Dirty Dough and Soom Soom Mediterranean as well as a virtual brand in Lucky Cat Poke Co. Craveworthy Brands has a total of 12 concepts under its corporate umbrella. Founded in 2015, Sigri has two units, both in New Jersey, and its menu features items cooked on clay stoves known as sigri.
  • Burgerville has new owners after having been acquired by a group of local investors, per various published reports. The chain has 39 units and expects to open its 40th location later this year in Wilsonville, Ore. By the end of 2025, Burgerville plans to add six to ten units.
  • Virtual brands are proving to be a growth vehicle for Denny’s. The family dining chain operates a trio of virtual brands – The Meltdown, The Burger Den, and Banda Burrito. Because Denny’s typically sees the bulk of its business during breakfast and lunch, the chain now uses the virtual brands to amp up customer convenience and leverage slower dayparts like dinner and late night, per a Restaurant Dive story. The virtual brands also help boost the company’s connection to younger customers. “Approximately 70% of our Gen Z and millennial guests utilize our off-premises channels compared to the same groups utilizing dine-in at approximately 40%,” said Denny’s CEO Kelli Valade.
  • Can a tech company run a restaurant? We will soon find out. Texas-based tech company InKind has purchased the assets of Etta, a well-regarded Chicago restaurant that filed for bankruptcy last month. The deal is valued at $4 million, according to various published reports. Etta’s owners filed for bankruptcy earlier this year despite the restaurant’s ongoing popularity in Chicago’s trendy Bucktown neighborhood.
  • How do customer habits change when ordering from an in-restaurant kiosk? It depends on the circumstances. Conventional wisdom says customers order more when using a kiosk. But that behavior changes when guests sense a line forming behind them, per a Restaurant Business story that cites data from a study conducted by the Temple School of Sport, Tourism and Hospitality Management. Some guests will feel pressure to complete their orders quickly which can lead to them ordering less food and they may default to items they’re familiar with rather than trying something new.
  • Digital dining is proving to be a delight for Yum! Brands. The multiconcept operator reports digital channels accounted for 55% of systemwide sales during the company’s first fiscal quarter, per a Restaurant Dive story. And this may just be the beginning. Yum! reports having more than 40 AI initiatives in progress to help enhance marketing, operations and more. The chain is said to be deploying its AI-powered Super App, which is a general manager support tool.
  • Easy Ice has acquired Tri Cities Supply Company, a Texas-based ice machine rental company. This marks Easy Ice’s second acquisition in less than a month. In April, Easy Ice bought New Mexico’s Iceworks, giving the company a greater presence in the Southwestern U.S.
  • Ernst & Young named Jeffrey Kiesel, Restaurant Technologies CEO, as an Entrepreneur of The Year 2024 Heartland Award finalist. The Heartland program celebrates entrepreneurs from the Dakotas, Iowa, Minnesota, Missouri, Nebraska, and Kansas. Now in its 38th year, Entrepreneur of The Year is the preeminent competitive business award for audacious leaders who disrupt markets, revolutionize sectors, and have a transformational impact on lives.
  • Polar Leasing broke ground on a new facility in Summerville, Fla., to help fuel its expansion in the Southeastern U.S. The company expects the facility to be fully operational by June 1. This will be a distribution center for the business to assist regional customers.
  • Nearly all of the assets for Foxtrot will be sold at auction on May 10, per a Crain’s Chicago Business report. This will include “inventory, intellectual property, accounts, chattel paper, documents, furniture, fixtures & equipment, general intangibles and goods,” according to a public notice of the foreclosure sale. Last week the upscale convenience store abruptly closed all its locations, along with sibling concept Dom’s. Neither concept has filed for bankruptcy yet and Dom’s is not included in this filing, the story notes.
  • Subway completed its previously announced sale to affiliates of Roark. In August of 2023, Roark reached an agreement to purchase the sandwich chain, which had been for sale for a while.

Economic News This Week

  • The U.S. economy added 175,000 jobs in April, and the U.S. Bureau of Labor Statistics reported. This was significantly less than the 240,000 jobs Dow Jones consensus had projected, per CNBC. The unemployment rate change came in at 3.9%, which is 0.1% greater than March.
  • Private sector employment increased by 192,000 jobs in April and annual pay was up 5.0% year-over-year, according to the April ADP National Employment Report. Economists had projected 183,000 jobs would be added, per a CNBC story. The leisure and hospitality sector led the way in April by adding 56,000 jobs.
  • The number of job openings totaled 8.5 million on the last business day of March, according to the U.S. Bureau of Labor Statistics. This represents a three-year low, per a Yahoo! Finance story.
  • U.S.-based employers announced 64,789 cuts in April, a 28% decrease from March, per data from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc. This represents a 3.3% decline from March 2023. So far this year, companies have announced 322,043 job cuts, down 4.6% from the cuts announced through April last year.
  • Initial jobless claims totaled 208,000 for the week ending April 27, 2024, per the U.S. Department of Labor. This is unchanged from the previous week. Economists polled by Reuters had projected initial jobless claims to total 212,000. The 4-week moving average was 210,000, a decrease of 3,500 from the previous week.
  • Labor productivity increased 0.3% in the first quarter of 2024, the U.S. Bureau of Labor Statistics reported. This is 3.2% less than the rate of increase for the previous quarter and it was less than the 0.8% increase economists had projected, per a Yahoo! Finance story.
  • Economic activity in the manufacturing sector contracted in April, per the Manufacturing ISM Report On Business. The study came in at 49.2%, down 1.1% from the previous month.
  • Economic activity in the services sector expanded in March as the Services PMI registered 51.4%, per the Services ISM Report On Business. Despite remaining in expansion mode, the April Services PMI came in 1.2 percentage points less than March.