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This Week in Foodservice

Retail Sales Decline While Restaurant Prices Increase, BK Parent Looks to Grow Abroad

The Census Bureau’s Advance Retail Sales Report for December was delayed for approximately a month due to the federal government shutdown. Total retail sales were down 1.2 percent from November. The sales decline was unexpected since several other sources predicted increases for the Christmas season as well as positive results reported by some major retailers. And, as we point out every month, retail sales are frequently revised.

Total retail sales were up 2.3 percent from December 2017 and up 5.0 percent for the entire year of 2018 over 2017. The sales number for November was revised down from +0.2 percent to +0.1 percent.

Unfortunately, foodservice and drinking places sales were also down from November by 0.7 percent. For the year, sales rose 5.9 percent over 2017 and December 2018 sales increased 4.0 percent from December the previous year. The advance number for November over October for foodservice was revised down from minus 0.5 percent to minus 0.7 percent.

Obviously, if the advance report stands, December was a disappointing month for both restaurants and bars as well as the economy as a whole. Thus, the preliminary report for December will be eagerly awaited.

Economic News This Week

Foodservice News This Week

  • Consumer prices for food increased 0.2 percent in January and 1.6 percent in the last 12 months, per the Bureau of Labor Statistics. Food at home prices were up 0.1 percent in January and 0.6 percent for the last 12 months. Consumers paid 0.3 percent more for food away from home in January and 2.8 percent more for food away from home in the last 12 months.
  • The partial shutdown of the Federal Government hurt. And, for restaurants in Washington, D.C., it hurt a lot. Fine-dining restaurants saw traffic drop by 33 percent. Fast feeders suffered, too, with Chick-fil-A, Arby’s and Starbucks noting traffic declines in the region. The Congressional Budget Office estimated the economy lost $11 billion as a result of the shutdown and that $3 billion will never be recovered.
  • Ecolab acquired an online training company. Lobster Ink was a privately held Geneva, Switzerland-based company that provides software training. The cost of the purchase was not given.
  • Restaurant Brands International wants to grow internationally. While admitting there was still plenty of “white space” in the U.S., the CEO of the parent of Burger King, Tim Hortons and Popeyes looks to expand its international system according to a Wall Street Journal article.
  • Solo diners are welcome in New York City. Reservation site Open Table says bookings by single diners rose 80 percent from 2014 to 2018. Valentine’s Day 2018 saw solo reservations jump 33 percent compared to 2015. One New York City operator finds single diners flattering since he knows they are there for the food rather than a social occasion.
  • Corporate Stirrings: Turning Point, a 16-unit breakfast, brunch and lunch chain located in the Mid-Atlantic region received a “growth investment” from NewSpring, a private equity firm. The amount of the investment was not given.
  • Growth Chains: Fuzzy Taco Shops will open restaurants in California, Colorado, North Carolina and Texas. Bad Daddy Burger Bar plans to open five units this year. Lupe Tortilla is looking for partners that will add 2 to 10 locations. The Golden Chick plans to open 25 restaurants this year. Blaze Pizza wants to grow from its current 300-plus locations to 500.
  • Comparable Store Sales Reports: Bloomin’ Brands (Combined up 1.6 percent, Outback up 2.9 percent, Carrabba’s up 0.8 percent, Bonefish Grill down 1.1 percent and Flemming’s down 0.4 percent), Burger King up 0.8 percent, Popeye’s Louisiana Kitchen down 0.1 percent and Tim Hortons up 2.2 percent.

For details and same-store sales of other chains, please click here for the latest Green Sheet.