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Our friends at Partstown/Heritage Parts have released the first episode in their “Back-to-Open” Partscast series. It looks at how the COVID-19 pandemic is affecting service companies and technicians who repair commercial kitchen equipment. From video service calls to planned maintenance programs, Katie Poole and Robson Dunwody from Clark Service Group and Tina Reese, President of Commercial Appliance Parts and Service, discuss new strategies and practices to adopt. Sounds very, very interesting.
 
You can access it on the Parts Town/Heritage website at Heritage Partscast: Back-To Open Part I
 
Or use your favorite podcast app:
Spotify: Heritage Partscast Back-To-Open Part 1;
Google: Heritage Partscast Back-To-Open Part 1
 
Stay well, please.
Robin

This Issue's Highlights…

Commentary: Use this downtime to reimagine your work process

 

Things You Should Know (The Most Important News)…

  • Government doings: PPP fixes, revised CDC reopening guidelines, EBT-Pandemic problems, liability issues
  • Coffee, coffee: JDE-Peet’s, Starbucks and Dunkin’
  • Other chain financing: bankruptcies, defaults and another stock float
  • Consumer data from Technomic, Datassential and Wash. State show consumers still hesitant to dine out
  • E&S news: New TriMark CFO, Franke’s 2019 results

 

Other News Of Note…

  • Reopening news: Some gains at casual dining, breaking prohibitions, mental health matters, and reopening maps
  • Other chain news: Darden, McD’s, Subway cuts, Compass hit, and new KFC sandwich
  • Closure issues continue to plague UK foodservice and E&S suppliers, Peter Backman’s “Weekly Update”
  • Where are my bubbles? Carbon dioxide shortage!
  • Two more: US Chinese restaurants begin to reopen; burgers and wine at Noma?

 

By The Numbers…

  • Chain transactions improve yet again
  • Consumer confidence stabilizes and is that helping restaurants?
  • Gasoline and oil prices on the rise
  • A new economic indicator! (New to me, anyway)

My Commentary...

May 29, 2020     News, Data, Analysis and Commentary from Robin Ashton

It’s A Great Time To Reimagine Ways To Be More Efficient

 

And now for something completely different.
 
We’ve been suggesting that we can all use the disruption of the coronavirus pandemic to retool our business processes. So, I was very pleased when I got an e-mail from Chet Marchwinski, communications director at the Lean Enterprise Institute, based in Boston, about a new book that can help you do just that.
 
I’ve long been a fan of the business process analysis LEI has brought to foodservice. When we were at Foodservice Equipment Reports, we had Josh Howell from LEI and Rich Vallante, the then-executive chef at Legal Sea Foods, explain how they used Lean principals to retool that chain’s work flows and equipment packages. They ended up with processes that saved labor, increased throughput, and enhanced speed-of-service. Full disclosure: Josh is the husband of my wife’s niece, so I’ve been hearing about Lean principals and foodservice for more than a decade. Josh was part of the team at Starbucks that first brought Lean to foodservice. He is now president of the Institute.
 
Here’s what Chet brought to my attention:
 
Dear Mr. Ashton,
 
This is a quick follow-up to my March 19 email about a new book on improving productivity and customer satisfaction at QSR restaurants while reducing employee turnover. 
 
Former Starbucks Regional Manager Karen Gaudet, author of the new book Steady Work, said that before reopening, quick-serve restaurants should use their empty facilities as “labs” to experiment with designing more efficient ways of working based on continuous improvement strategy and tactics.
 
“If they're able to get inside their restaurants before they completely reopen to the public, they could start to model out and test some new ways of doing work,” she said in a recent podcast interview with Gemba Academy, a lean management training company: Gemba Academy: Implementing Lean At Starbucks With Karen Gaudet
 
She noted that the restaurant business has had standards—such as regulations for food safety—for a very long time. But it hasn’t had a standard process for thinking about how work gets done.
 
Steady Work describes a standard way restaurants and cafes can think about how work gets done by revealing the implementation of “Playbook,” a continuous improvement operating system deployed by Starbucks during the financial crisis. Karen details how the system:
 

  • Trained store leaders to work with employees to deeply analyze frontline work by observing, timing, and mapping every step.
  • Split quick-serve tasks into smaller timed components, which were combined with point-of-sales data to create standardized routines or “plays.”
  • Developed different plays called by store managers for different demand levels so staff knew how to respond quickly and efficiently.
  • Allowed managers at some of the busiest stores in New England to take scheduled days off -- in a row! – without getting frantic calls from staff thanks to the shift from ad hoc work methods to standardized routines.

 
The operating system is relevant today because it helps restaurant leaders contend with crisis recovery, managing change, demand fluctuations, food waste, keeping the human connection, and retaining employees.
 
Karen is now a team leader at the nonprofit Lean Enterprise Institute, publisher of Steady Work. A sample chapter, Karen’s bio, and more information are on the book’s page: Lean: Bookstore/Karen Gaudet Excerpt/Steady Work
 
Check it out. You can see an overview of the Lean Enterprise Institute, its history and resources, here: LEI
 
Stay well. And I still say…
 
Cheers, Robin
 
Market Trends/Economic Trends, Operator Trends

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Things You Should Know
(The Most Important News)…

Government Continues To Struggle With Covid Response

 

The federal government continues to struggle with how to help business, particularly restaurants and other foodservice, survive the coronavirus pandemic. Here’s what’s been going on the past week:
 
   --Congress is looking at ways to extend and ease restrictions on the much-maligned Paycheck Protection Program after Treasury Secretary Steven Mnuchin said he couldn’t act without Congressional authorization. Competing bills have been floated in the Senate and House. The House bill is much more generous, including easing the requirement that 75% of the loan much be spent on payroll to achieve loan forgiveness. You can read all about it here. FEDA reports the National Assn. of Wholesalers/Distributors supports the House bill: The Hill: PPP Extension?; RB: Feds Look At PPP Options For Restaurants; NRN: Lawmakers Debate PPP Improvements; FEDA: PPP Fix Vote Expected This Week


   --The Center for Disease Control & Prevention released extensive revised guidelines for reopening restaurants and other foodservice facilities. You can see all the details here: NRN: CDC Updates Guidelines For Foodservice; QSR: Revised CDC Guidelines


   --The New York Times ran an investigative article earlier this week detailing how slowly many states are rolling out a legislated program to replace school food for eligible children and their families with an electronic payment card similar to what is used for SNAP, i.e. food stamps. Seems many states’ computer systems just aren’t up to the task of ID-ing and documenting the eligible folks. What a surprise. (That’s sarcasm, just in case it isn’t obvious.) NYT: EBT School Food Program Rolls Out Slowly

   --The industry, Republican senators and the Trump administration have been making a lot of noise about passing legislation that would shield reopening businesses from employee or customer legal liability suits. Democrats in the House have been pushing back. But according to an article in Restaurant Hospitality, such a bill wouldn’t really shield restaurants from employee suits anyway. Those go through workman’s comp.

“Because there is no federal legislation or OSHA-mandatory coronavirus-specific rules issued yet to articulate what an employer’s duty of care is with respect to COVID, the main thing an employer really should do is to adhere to the government guidance that are coming out,” labor attorney Omar Ali-Shamaa said. “That will be the best evidence for the operator that they have fulfilled the duty of care–or made good faith efforts–to comply with OSHA standards.” RH: Federal Liability Waiver Unlikely To Shield Restaurants

Ain’t none of this easy. A limited Census Bureau study of what kinds of small business applied for and received PPP loans found nearly 85% of hotels and restaurants had applied. Rest. Dive: 85% Of Hotels And Restaurants Sought PPP Loans: Census Bureau. It shows just how desperate most hospitality operators are.

I just wish we’d adopted a European-style system where the government paid businesses to keep their employees on the payroll. That’s not perfect but it’s a whole lot better for everyone. It also saves money as the direct payments offset what the federal government is providing in unemployment insurance. There is a proposal in Congress, with bipartisan backing, for moving to such a system, but it doesn’t have adequate support. Oh, well.

Regulations; Operators/Chain & Commercial Operators, Noncommercial Operators

Coffee, Coffee, Coffee: JDE-Peet’s, Starbucks And Dunkin’

 

Lots of news about coffee-oriented companies in the past week:

   --JAB Holding, the Dutch company that owns Panera, Pr t À Manger, Krispy Kreme and Keurig-Dr Pepper, is moving ahead with a plan to spin off its coffee business, which is about 80% retail including Jacob Douwe Egbert and 20% cafés including Peet’s, in an initial public offering. If it goes, it would be the largest IPO in Europe this year. Restaurant SmartBrief/WSJ: JAB Eyes Coffee IPO; NRN: JAB Coffee IPO; Global Coffee Report: JDE Peet's To Go Public?

Retail coffee is doing much better during the pandemic, so it’s an interesting two-sided play. QSRWeb: Foodservice Coffee Hit By Switch To Retail

   --Starbucks sales have improved to where they are running about 65% of normal. The chain has been opening its cafés for counter interactions. NRN: Starbucks Has Regained 65% Of Sales. But the success of its units with drive-thrus during the pandemic and closure of many of its shopping mail sites has the chain moving toward drive-thrus as quickly as possible. RB: Starbucks To Speed Drive-Thru Additions

   --Dunkin’ had already been adding a lot more takeout into its NextGen store redesign, a move promoted by its increase in digital ordering, but now, with the Covid situation, they have upped the ante. QSR: Dunkin' Tweaks New Design For Covid

The pandemic is also having impacts on global coffee supplies. Most of the 2019-2020 crop was already harvested, but the drop in foodservice coffee sales, combined with the boost in coffee at home, is having some interesting effects on prices and supplies. The Intl. Coffee Organization has published a new study modeling the potential impacts. Global Coffee Report: ICO Analysis Of Covid Impact On Coffee Prices

Operators/Chain & Commercial Operators; Market Trends/Operator Trends

Other Chain Finance News: La Pain Quotidien, Craftworks And Chains At Default Risk


The pandemic’s effects continue to weed out weaker operators.

   --Le Pain Quotidien filed for Chapter 11 bankruptcy May 27 and appears to have a deal to sell the chain for $3 million to Aurify Brands to keep 35 stores open and avoid liquidation. Aurify, based in New York City, owns restaurants brands including The Little Beet, The Little Beet Table, Melt Shop and Fields Good Chicken. Le Pain Quotidien, also NYC-based, operated 98 restaurants in the US under license to the Belgian brand. That company is also reorganizing in Belgium. The chain had sales in 2019 of $153 million but lost nearly $17 million, according to the court filing. RB: Le Pain Quotidien Files For Bankruptcy

  --The lender that had previously offered to buy CraftWorks, the parent of Logan’s Roadhouse, Old Chicago Pizza & Taproom, Rock Bottom Brewery, Gordon Biersch and other brands, has apparently bought the company for $93 million in assumed debt and assumed liabilities. The buyer, reportedly Fortress Credit Co., intends to open at least some of the company’s 261 units. It also franchisees 77 stores. RB: Judge OKs $93MM Craftworks Sale

   --As we’ve been writing, cash is king. Ruth’s Chris, which was shamed into returning $20 million in PPP loans, announced last week that it has a deal with investment firm Jeffries LLC to buy $43.5 million in common stock in the company. Jeffries, which will resell the stock, also has an option of another $6.5 million. Ruth’s Chris will use the money to pay down debt and strengthen its balance sheet. NRN: Ruth's Chris Proposes New Stock Sales

   --S&P Global Market Intelligence released a report analyzing which publicly traded restaurant chain companies may be at risk of debt defaults. Among the companies most at risk are Dave & Buster’s and Blooming’ Brands, but Cheesecake Factory, Denny’s and Brinker Intl. also have risks higher than the average 24% S&P now calculates. Average risk was less than 5% at the beginning of the year. Least at risk are QSR and fast-casual companies such as Wingstop, Papa John’s and Chipotle and Rest. Dive: Five Chains In Danger Of Default; RB: Chain Default Risks

Most Consumers Want To Dine In Restaurants, But They Are Afraid


As most states loosen restrictions on dining in restaurants, research groups such as Technomic and Datassential continue to release data showing a majority of consumers really miss dining in restaurants, but are very, very cautious about returning. And another survey in Washington state shows the same fears. Here’s some recaps:
 


   --Among the wealth of consumer and market data Technomic is releasing weekly during the Covid-19 outbreak for its “Technomic’s Take,” we’ll focus on two from their May 15 release. The first is on consumer spending levels. This is what the research firm wrote:
 
Consumer spending increased by 4% this past week and has crossed the $40,000 per 1,000 consumers mark for the first time since the week of March 15. At the present rate of change, this puts a total recovery of lost spending (back to 2019 levels) well into 2022, as the cumulative impact of the pandemic now sits at a total loss of 31% of expected industrywide spending.

A quicker rebound to the market will require far higher increases in spending week over week. This is looking increasingly unlikely as markets start to reopen in highly fragmented stages and public health risks remain heightened nationwide.”

Second, Technomic polled consumers on what safety precautions they believe are necessary for them to feel comfortable dining in. For example, half think six feet is the appropriate distancing. When it comes to other measures, the firm wrote the following to go with the accompanying chart:
 
More than half of consumers would follow social distancing measures, but less than half would be willing to wear a mask or gloves when in a restaurant. Consumers ages 35-44 are more likely to wear a mask to be able to dine in.Technomic's Take 05-15-20: Consumer Perspectives

   --We’ve been following closely Datassential’s weekly tracking of consumer concerns about the coronavirus and the percentage of consumers avoiding restaurants. Note that this isn’t just avoiding dining in, but just avoiding. The numbers have been fairly consistent for the past month, after dropping about 10 points from mid-April. But the percentage of those surveyed who are “very concerned” about the virus actually rose last week to 56%. Only 7% of consumers are “not at all concerned.” Datassential’s Jack Li said in the weekly webinar May 22 that the percentage of consumers avoiding restaurants is “coming down gradually.” But the numbers indeed show it is very gradual. You can access all the Datassential reports here: Datassential: Covid Reports, and also sign up to attend their weekly webinars Friday afternoons. I can attest that they are really fun and very informative.

   --A new study from Washington State University’s Carson College of Business found roughly two-thirds of consumers would not be willing to eat in a restaurant if stay-at-home orders were lifted tomorrow. Almost half would wait one to three months before venturing out to dine-in with another person. Restaurant Dive: 2/3s Of Consumers Still Nervous About Dine-In

I do understand the consumers who said they wouldn’t wear a mask while dining in. It’s pretty hard to eat with the mask on. But the trend here seems very clear: Consumers remain very nervous about mingling with their fellow unknown humans in restaurants.
 
Market Trends/Consumer Trends, Operator Trends

E&S Market News: TriMark Names New CFO, Franke Group Report 2019 Results


Two important developments for the E&S market were announced last week:

   --TriMark, which earlier this month named a new chief supply chain officer, said it has named Chad Brooks chief financial officer. Brooks, who will report directly to CEO Marie Ffolkes and be a member of the Executive Leadership team, will have full responsibility for TriMark’s finance and accounting operations. An 11-year veteran of General Electric, Brooks most recently was CFO of Workforce Logiq. He has held finance leadership positions for companies owned by a number of leading private equity companies. Workforce Logiq is owned by Carlyle Companies, but he has also been CFO of Bio Products Laboratory, Guilford Mills and Bushmaster. “I am confident in his expertise to lead the finance team to support our strategic objectives,” Ffolkes said, in making the announcement. TriMark USA: TriMark Names CFO
 
   --Artemis Group, which owns Franke Group, released it 2019 financial results May 26. The Swiss company said Franke Group organic sales rose 3.7% and overall revenue rose 14.5% thanks to several acquisitions. EBIT earnings doubled for the group. And all five divisions of Franke Group, which include three domestic oriented companies, also posted organic growth. Franke Foodservice, which serves a number of leading chains worldwide, had a 1.3% organic sales increase. Franke Coffee Systems, the other foodservice-oriented division, is growing very quickly and benefited from the acquisition of Dalla Corte in Italy. Organic growth for Franke Group was a very strong 10.2% 1Q/20.

But Artemis said the pandemic is creating problems with the supply of components, freight capacities and order declines. The company is also focusing on employee health and safety and has taken “all necessary measures.” It has implemented cost-cutting such as reducing hours, overtime and holidays. “In this context, it is very difficult to provide a forecast for the current financial year at the present time.” Franke Group: Press Releases
 
In other words, Franke and Artemis are dealing with the same problems as every other global company.
 
E&S Companies/Manufacturers & Reps; Global

Other News Of Note…

More News About Reopenings And Their Impact On Restaurants


As more states begin to open restaurants for at least limited dining—anyone up for a table in the street in the heat of summer?—the data on the impact on restaurant sales is beginning to show some gains.
 
   --FSR rounded up data from a number of sources—not just the Darden results noted below, but also interesting state-by-state data from Black Box—to conclude that the reopenings are having a positive effect on sales, particularly at casual-dining concepts. Black Box said overall same-store sales in the eight states that first reopened dine-in in early May saw the fastest casual-dining sales growth and ended the week 17 points ahead of the rest of the country, even if they were still off 34% from last year. And as one would expect, casual-dining to-go business slowed a bit in those states. (QSR dine-in reopenings didn’t seem to affect their off-premise numbers at all. Open Table also shows a tick up in seated diners in the open states through May 24. FSR: Reopening Drives Some Progress For Casual Dining

   --Of course, even as states began to reopen, some operators felt compelled to jump the gun. The most widely ballyhooed was C&C Coffee & Kitchen in Castle Rock, Colo., which touted its reopening on Mother’s Day. The response from Colorado Gov. Jared Polis was swift and severe: He called the restaurant “an immediate health hazard” and its license was suspended for 30 days. It was announced earlier this week that C&C has sued Gov. Polis and the state over the suspension.

But C&C is hardly the only example. Restaurants in Illinois and California, which were also still locked down tight, saw restaurants defy the closures in early May. The Illinois Restaurant Assn., which wants dining rooms open as soon as possible too, said it “encourages all businesses to follow official rulings…and guidance from public health experts….” RH: Restaurants Risk Opening In Still-Restricted States; Westword: C&C Coffee Sues Colo. And Gov.

   --Randy Brunschwig, who runs the Excell and Nissco dealer buying and marketing groups, wrote me last week to ask if I’d seen a map detailing how various states are reopening. I found a couple, but they weren’t exactly what he had in mind. But since then, I’ve seen two more, from the New York Times and the Washington Post. They are really cool. One can click on each state and see all that’s going on with restaurant rules. Here they are: WaPo: Reopening Map 05-22-20 ; NYT: Reopening Map 05-22-20

   --Not least, FoodService Director ran a special report reminding us all that reopening also will create a great deal of stress for those employees returning to the front lines. They discuss a number of ways bosses can ease the transition. FSD: Employee Mental Health Matters

Operators/Chain & Commercial Operators; Regulations

More Chain News: Darden, McDonald’s, Domino’s Surge, Subway Layoffs, Compass Hit, And New KFC Sandwich

 

The big chain news was rolling in last week. I find it interesting that so many chains are issuing guidance between quarterly reports. Here’s the most essential news:

   --Darden said almost half its restaurants are open for at least limited dine-in and flagship brands Olive Garden and Longhorn Steakhouse have seen same-store sales comp rise 10 points in March. But Darden’s other brands remain off 63% to 65% in total. FSR: Darden Sales Mostly Improve

   --A couple of news items about McDonald’s last week. The one that intrigued us most was a report that the company has set aside “tens of millions of dollars” to aid struggling franchisees in the US, but that some franchisees may have to sell or downsize. Franchisees were not amused. Other companies have also noted the possibility of retrenchment or new owners, including KFC. Rest. Dive: McD's Planning Smaller US Footprint?

Separately, Fight for $15 in the US and unions in Europe and Brazil have joined forces to complain to a group that represents the Organization of Economic Cooperation and Development about alleged sexual harassment claims at McDonald’s. NRN: Intl. Unions Join To Force McD's To Address Sex Harassment

   --Domino’s CEO Ritch Allison said Domino’s sales comps are up 14% so far in the 2Q/20, including 21% since April 20, driven by demand for delivery and carryout. Intl. sales, which have not been following US trends, also are improving, with same-store sales up 3.3% in the past four weeks. As we went to press, Papa John’s also announced strong results. We’ll report next week. RB: Domino's Sales Surge On Delivery Demand

   --Struggling Subway laid off another 150 corporate employees last week, saying that the pandemic’s effects on sales have forced the company “to accelerate a restructuring plan” already in the works. Subway laid off 300 in February. RB: Subway Sheds More Staff

   --Compass Group in London updated shareholders on the Covid impacts on the company. Group CEO Dominic Blakemore said, “The Covid-19 pandemic has had a profound impact on Compass.” Indeed. The food management and service giant said organic revenue fell 20.4% in March and 46.1% in April. It’s too bad. Organic revenue growth was up 6% for the first five months of Compass’s half year ended March, with North America up 8.1%. FM/Compass Group: Huge Covid Hit In March And April

   --Panera launched so-called “geo-fencing” for pickup customers who opt in through the chain’s app. The technology alerts the store when the customer arrives in the parking lot to enhance frictionless curbside pickup. CSA: Panera Uses Geofencing For Curbside Pickup

   --KFC announced this week that it is testing a new chicken sandwich, reigniting the famous “chicken sandwich wars” that dramatically helped both Popeyes and Chick-fil-A beginning last August. It’s an extra crispy-breaded product (open fryers, not pressure fryers). “We wanted a chicken sandwich that really lives up to our legacy as the fried chicken experts,” said KFC’s US CMO Andrea Zahumensky, “and let’s face it, ours wasn’t the one to beat.” The product test is in 15 stores in Orlando, Fla. RB: KFC Reignites Chix Sandwich Wars

That’s enough for this week. What an industry.

Operators/Chin & Commercial Operators; Global

UK Update: FEA Restates Aid Request, Tourist Quarantines, Open Guidelines, And Backman’s Briefing

 

The UK hospitality industry continues to suffer under lockdown and other restrictions. Among developments during the past week:

   --The Foodservice Equipment Assn’s Keith Warren, speaking as part of a panel, again restated that foodservice E&S suppliers should get all the same government support the government offers other hospitality entities. He also asked for support of R&D to help the industry emerge from the pandemic. Catering Insight: FEA Restates Claim For Govt. Aid

   --The UK government announced that it will impose a 14-day quarantine on intl. arrivals to the country beginning June 8. Though the govt. said it will “work with and support” the hospitality and tourism sectors, many hotel operators and industry representatives understandably said the scheme will be “catastrophic.” The Caterer: Quarantine Scheme Will Kill UK Tourism

   --UK Hospitality called on the government, which has said it doesn’t want to begin opening pubs and restaurants until early July at the earliest, to support a safe and sustainable opening and provided a four-step “#Fair4HospitalityRoadmap” to facilitate that reopening. It’s a 75-page document. “Hospitality needs the UK and (local government bodies) to help us deliver for our customers,” said UK Hospitality’s CEO Kate Nicolls. The Caterer: UK Hospitality Reopening Plan

   -- And while UK operators wait to reopen, in spite of the “better than the US” government support, they are going into bankruptcy. The latest to announce “calling in administrators” is the Casual Dining Group, operators of brands such as Café Rouge. You can read all about it in consultant Peter Backman’s latest “Weekly Briefing.” Peter Backman: UK Weekly Briefing, 05-24-20

E&S Companies; Associations; Regulations; Operators/Chain & Commercial Operators; Global

Beverage And Foodservice Industries Face CO2 Shortage

 

As if we don’t have enough problems, it looks like the price of CO2 could rise. It turns out that about 40% of the carbon dioxide used to carbonate beverages, both pre- and post-mix, are a byproduct of ethanol production. Ethanol is the stuff made from corn that the Feds require be blended with gasoline. But with the crash in gasoline demand, there has been less CO2 produced, and this is driving up prices. WSJ/RTE: 05-27-20: Carbon Dioxide Shortage


Overall, carbon dioxide production has fallen by about 30% so far this year. That’s a lot of bubbles. Almost two thirds of CO2 is used in food and beverages.


Market Trends/E&S & Commodities Pricing Trends

US Chinese Restaurants Opening Fast And Noma Tries Burgers


A couple more items we found very interesting this past week:

   --Many of us were very worried about how many family-owned Chinese restaurants closed in the US as the pandemic intensified. At one point as many as 60% of the Chinese restaurants had closed. But now new data from Womply, the credit-card processor that published the original research, shows they are, thankfully, reopening. The company said “Chinese restaurants have been reopening faster than any other restaurants category.” By May 16, only 26% of Chinese restaurants in the US were still closed, right in line with other restaurants. “Perhaps consumer xenophobia is subsiding?” Womply asked. RB: US Chinese Restaurants Making Comeback

   --And just because it’s fun, and one should never underestimate the resourcefulness—and sense of humor—of leading chefs, Bloomberg and others reported this week that Noma, the famous Copenhagen restaurant that has often been named the world’s top restaurant during the past two decades, is trying a burger and wine bar spin until the intl. travelers who are the restaurant’s usual customers can return. Good for René Redzepi! I’ll bet it’s a really good burger. (It’s on the regular menu, too, and has long been, by the way.) Bloomberg: Noma's Short-Term Fix? Burgers And Wine

Hey, if Grant Achatz at Alinea in Chicago can offer takeout beef Wellington and duck confit for $34.95 (my son ordered the duck confit and it was wonderful), Redzepi can do a burger bar. And I’m really, really happy to see the Chinese restaurants reopening. Maybe it bodes well for other independent operators.

Operators/Chain & Commercial Operators; Global

By The Numbers…

Big Chain Transaction Counts Continue To Improve

 

Every week, the transaction data from NPD’s CREST Performance Alerts for the 70 big limited-service and full-service chains it tracks gets a little better. For the week ended May 17, overall transactions were off only 21%, better than the previous week’s 23% and way better than the declines of more than 40% the end of March, early April. NPD said transaction counts benefited from the estimated 93,000 restaurants that opened dine-in after May 10. This led to a dramatic 13-point improvement in the transaction counts for the full-service chains in the states that reopened dine-in: They were only off 33% the week ended May 17 versus 46% the week ended May 10, even with Mother’s Day in that week’s count. For the country as a whole, full-service transaction were off 49% compared to 58% the prior week. QSRs saw a 20% decline the week ended May 17. NPD: Press Releases
 
Remember that the NPD data only covers 70 large chains and these folks do much better than restaurants as a whole, particularly because the big QSRs are in the mix. But still, this is heartening news about the full-service transaction rebound. We’ve charted out all the weekly data NPD has been releasing during the pandemic. It helps to better see the trends.
 
Market Trends/Operator Trends

Consumer Confidence Stabilized In May, The Conference Board Reports

 

The Conference Board released its May Consumer Confidence Index May 26 and like The University of Michigan’s Consumer Sentiment Index released mid-month, it stabilized after two months of historic declines. The index rose to 86.6 versus 85.7 in April. The Present Situation component continued to slide a bit, down to 71.1 from 73 in April, but the Expectations component rose to 96.9 from 94.3. “Short-term expectations moderately increased as the gradual reopening of the economy helped improve consumers’ spirits,” said Lynn Franco, the Board’s senior economist. But she warned, “The uneven path to recovery and potential second wave are likely to keep the cloud of uncertainty handing over consumers’ heads.” The Conference Board: 05-20 Consumer Confidence


And because we like to cite our former magazines when we can, we want you to see this FE&S analysis of how consumer confidence appears to be driving improved restaurant sales. It’s very well done. FES: Consumer Confidence + Restaurant Sales


Market Trends/Economic Trends

Gasoline Prices Begin To Rise As Americans Return To The Roads

 

Gasoline prices have risen nearly 18 cents since falling to $1.785 on May 4, as Americans, freed from strict lockdown, are returning to the roads and driving up demand. Prices surged past $1.96, the national average for a gallon of regular, on May 25, and have hung there all week. But as AAA spokesperson Jeanette Casselano said last week, it is the first time Americans have enjoyed average gas prices below $2 a gallon since 2003. And the average price of a gallon of regular is still 92 cents less than a year ago. AAA: Gas Prices
 
Crude oil prices have also been surging as the world economy begins to tentatively reopen. The question is whether the demand can be sustained, as reopening seems to cause new virus outbreaks. The futures contract for WTI crude, the US benchmark, stood above $33 bbl. May 25.
 
While plunging gasoline prices haven’t had any impact on foodservice sales since the pandemic hit the US, since few could go out to eat, the surge in demand just might have negative effects on such sales. The higher prices most affect essential workers, including delivery drivers, who still don’t make enough to be immune from the hit to disposable incomes.
 
Market Trends/Economic Trends

FEDA Introduces Me To A New Economic Indicator!

 

I know it’s a bit pathetic, but I get really excited when I discover a new economic indicator, especially one from which I can steal charts for this newsletter. And thanks to FEDA New & Views this week, we now have been introduced to the “Weekly Economic Indicator.” This is apparently produced weekly by good, wonky economists at the New York and Dallas Feds and Harvard University. And what’s really cool is it tracks to US annualized real gross domestic product, so it’s comparable to the Blue Chip and other forecasts. The WEI is currently at -11.09 the week ending May 23. That means it projects that’s how much real GDP will decline this year. Yikes! FEDA: Weekly Economic Index. You can see all the many indicators the WEI tracks here: Weekly Economic Index

 

I don’t know where FEDA found, this, I’ll have to ask Tim O’Connor, but I think it’s really, really cool. Thank you!

Curated and written by Robin Ashton, Principal at Ashton Foodservice Consulting. For information, e-mail Robin Ashton at rashton@theashtonreport.com.

The Ashton Report is published weekly and is a unit of RGA 2015 Holdings LLC.

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