The Census Bureau’s advance report for December estimated retail sales were up 0.3 percent from November and up 5.8 percent over December 2018. For the 12 months of 2019 total retails sales were up 3.6 percent. The Census Bureau revised retail sales for November over October up from 0.2 percent to 0.3 percent.

As for foodservice and drinking places, the Bureau estimated sales increased 0.2 percent in December from November. Further, restaurant sales in December last year were up 4.9 percent from December 2018. For all 12 months of 2019 restaurants and bars saw sales rise 4.4 percent.

The Census Bureau did revise the advance sales number for foodservice from down 0.3 percent in November from October to down 0.6 percent for that time period.

Overall, the December report indicates consumers are continuing to spend, including at restaurants. 

There are some things to consider when looking at the government data. First, only restaurants and bars are surveyed. Not included are hotels, motels, resorts, transportation feeding, retailers (c-stores, supermarkets, etc.) employee feeding, hospitals, nursing homes, schools, colleges and universities, and military feeding.

The statistics are based on small initial samples (thus, the “advance” designation) and are subject to revisions when a larger sample is received. Some of these revisions are extensive. And, while the sales data is adjusted for calendar shifts such as holidays, weekends, etc., there are no adjustments for menu price changes.

Economic News This Week

• Initial jobless claims declined 10,000 to 204,000 for the week ending Jan. 11, 2020, from the previous week. The 4-week moving average fell by 7,750 to 216,250. It appears that the claims gyrations from a few weeks ago were an aberration.
• The Federal Reserve reported that industrial production declined by 0.3 percent. Manufacturing production rose by 0.2 percent and mining production increased by 1.3 percent, but those increases were offset by a decrease of 5.6 percent in utility output as the result of unseasonably warm weather in December. Capacity Utilization fell 0.4 percentage points in December to 77.0 percent, a rate that is 2.8 percentage points below its long-run (1972-2018) average.
• The Empire State Manufacturing Index from The New York Federal Reserve grew slightly in January. The index rose from 3.3 in December to 4.8 in January. Any number greater than zero indicates growth while any finding less than zero indicates declining activity. The New Orders Index rose from 1.7 in December to 6.6 in January. The Shipments Index edged down from 9.5 in December to 8.6 in January. Unfilled Orders improve but stayed in negative territory moving from minus 13.8 last month to minus 2.7 in January. The employment indexes were little changed.
• The Federal Reserve Bank of Philadelphia’s Manufacturing Business Outlook Survey showed increasing activity in the region. The index increased almost 15 points from 2.4 in December to 17.0 in January. The New Orders Index rose to 18.2 in January from 11.1 last month. Shipments increased to 23.4 from 15.7 in December. However, the Unfilled Orders Index slid into negative territory, falling to minus 3.7 from 8.6 in December.
• Christmas sales increased 4.1 percent in 2019 2018 according to the National Retail Federation. This increase is almost double the rate sales rose in 2018. However, other sources reported that many mid-priced stores (Target, J.C. Penny’s, etc.) had very weak holiday sales, while on the positive side, online sales were up 14.6 percent year over year.
• The University of Michigan’s Index of Consumer Sentiment started the year at a high level. The index reading was down very slightly at 99.1 from 99.3 in December. The Current Conditions Index edged up slightly to 115.8 while the Expectations Index was down slightly to 88.3. A University spokesman said that consumer spending should continue based on this month’s results.

Foodservice News This Week

• Consumer prices for food increased 0.2 percent in December and were up 1.8 for all of 2019. But, as pointed out throughout the year, price changes for food at home and those for food away from home varied significantly. The price index for food at home rose 0.1 percent in December while the index for food away from home increased 0.3 percent for the month. As for all of 2019, prices for food at home were up 0.7 percent but increased more than 4 times for food away from home, at 3.1 percent. For consumers on a tight budget, eating out is at a substantial economic disadvantage.
• F. Chang’s is introducing counter service models. Called P.F. Chang’s To Go, they will offer from scratch cooking and a paired down version of the company’s traditional menu. There will be a walkup counter but very little customer seating. P.F. Chang’s stressed they have no plans to replace their full-service operations with the new design.
• Entrepreneur magazine’s ranking of the strongest 500 franchises shows foodservice operations dominate with 7 of the top 10 strongest franchises. Dunkin’ (#1), Taco Bell (#2), McDonald’s (#3), Sonic Drive-In (#4), Jersey Mike’s Subs (#8), Culver’s (#9) and Pizza Hut (#10.) More than 100 of the total 500 listings are food operations.
• Robot restaurants are finding a rough go of it in San Francisco. Given a technologically oriented population and a lot of Millennials who are trying to save time, the City by the Bay would seem like a great market for robot restaurant operations. Yet, a number of them have failed recently. Some people think the reason is that consumers want human interaction when eating out.
• Corporate Stirrings: Boston-based Good fast-casual food chain has sold three corporate locations to a Canadian franchisee. Two of the units are in Toronto while the third is in Oakville.
• Growth Chains: Noting Domino’s Pizza’s significant increase in the chain’s share of the pizza delivery market, Domino’s chief financial officer said he believed they could add 2,000 stores to their current 6,000 locations. Saladworks is expanding in the Ohio with stores in Cincinnati, Cleveland, Columbus and Dayton.

For the latest same store sales reports, please click here for the Green Sheet.