Is the restaurant industry adding or shedding jobs? And which quick-service restaurant is trying its hand at solar energy? Answers to these questions and more This Week in Foodservice.

Big cities continue to give restaurant workers a big boost.

Tipped workers in Chicago restaurants, for example, got a raise when the calendar rolled over to July. The bump in pay came courtesy of a new ordinance that increased the tipped minimum wage to $11.02 per hour from $9.48 per hour. Overall, the tipped minimum wage will increase by 8% per year for five years until it’s on par with the city’s standard minimum wage, per the Chicago Sun Times.

Previously, seven states paid restaurant workers the base minimum wage plus tips: California, Oregon, Washington, Nevada, Minnesota, Montana, and Alaska. This year, legislation to raise the tipped minimum wage was proposed in 17 states, including Illinois, but none passed, according to the National Restaurant Association.

In Los Angeles, the City Council is expected to review the Fair Work Week law, per the Los Angeles Times. If passed, this legislation will require fast-food companies to give employees their schedules in advance and provide a minimum of six hours of paid training to educate workers on their rights. It would also lead to fast-food workers accruing an hour of paid time off for every 30 hours they work, in addition to the paid sick leave they already get. This comes on the heels of California having raised the minimum wage for fast food workers to $20 per hour earlier this year.

Foodservice News

• While the overall jobs report was good in June, it was not due to the restaurant industry. The U.S. economy added 206,000 jobs in June, per the U.S. Bureau of Labor Statistics. Eating and drinking places cut a net 3,100 jobs in June, per an analysis of the jobs data by the National Restaurant Association. In total, eating and drinking places added all 900 jobs during the second quarter, the NRA said. This represents the weakest quarterly employment performance since the fourth quarter of 2020 when the industry shed 285,000 jobs during the throes of the COVID-19 pandemic. Despite the rough second quarter, the NRA notes that industry employment remains roughly 36,000 positions greater than its pre-pandemic levels. June job gains occurred in government, health care, social assistance, and construction. Economists had projected the economy would add 190,000 positions, per Yahoo! Finance. The stronger-than-anticipated results spurred speculation about the U.S. Federal Reserve potentially cutting interest rates.
• What can commercial restaurants learn from college and university foodservice operators? Turns out plenty. Colleges turn out restaurants’ next generation of customers, or so the old saying goes. That’s why commercial restaurants should be mindful of a variety of trends affecting college foodservice, as restaurant development + design points out. These trends include a need to create social spaces, offer variety and flexibility, understand the need for speed and embrace micromarkets, where applicable.
• The beverage business will continue to boom in the coming years. Beverage sales in the foodservice segment totaled $232 billion in 2023, per Technomic’s biennial Away-From-Home Study. The Chicago-based market research firm projects beverage sales will grow at a compound annual growth rate of 2.1% through 2028. Cold beverage sales increased 8.3% over the past year, Technomic adds. Limited-service coffee and fast-casual restaurants account for 49% of consumers’ spending on beverages.
• Add Walk-On’s Sports Bistreaux to the growing number of restaurant chains exploring smaller units. The typical Walk-On’s unit runs between 8,000 square feet to 10,000 square feet. The smaller prototypes could go as small as 5,500 square feet, per a Nation’s Restaurant News report. Walk-On’s is exploring smaller units to accelerate its growth.
• Wendy’s is turning to solar energy to lower its carbon footprint. The chain is partnering with a solar acquisitions and services provider to source clean energy and reduce carbon emissions at nearly 100 company-operated units and roughly 40 franchised units in New York, Massachusetts and Illinois, per Restaurant Dive. Wendy’s says participating restaurants will source 30% to 100% of their energy through solar power without having to install onsite solar panels.

Economic News

• The private sector added 150,000 jobs in June, per the ADP National Employment Report. This is 7,000 jobs less than some economists had forecast, per CNBC. Year-over-year wage gains came in at 4.9%, which is the smallest increase since Aug. 2021, CNBC added. Leisure and hospitality led the way, adding 63,000 positions. “Job growth has been solid, but not broad-based,” said Nela Richardson, chief economist, ADP. “Had it not been for a rebound in hiring in leisure and hospitality, June would have been a downbeat month.” In terms of business size, employers with 50 to 249 employees added 65,000 positions, which is greater than any other segment.
• Job cuts announced by U.S.-based employers in June were 23.6% less than the previous month, per data from Challenger, Gray & Christmas. The number of cuts announced were, though, 19.08% greater than in June of 2023. Overall, the number of cuts announced through the first half of 2024 is 5.1% less than the first half of 2023.
• Initial jobless claims climbed by 4,000 for the week-ending June 29, 2024, per the U.S. Department of Labor. The four-week moving average increased by 2,250 claims.
• New orders for manufactured goods declined 0.5% in May compared to the previous month, per data from the U.S. Census Bureau. This comes after a 0.4% April increase. Economists had projected a 0.2% increase for May, per Reuters. Shipments declined 0.7% in May after increasing 0.8% in April.