The U.S. Census Bureau’s advance report for March shows total retail sales up 1.6 percent from February and up 3.6 percent from March 2018. There was no change to the minus 0.2 percent initially reported for total U.S. retail sales in February from January. In first 3 months of this year, the Census Bureau puts total retail sales up 2.2 percent.
The March report has sales for food services and drinking places up 0.8 percent from February. Compared to March of last year, restaurants and bars had sales rise 4.3 percent. In the first 3 months of this year, sales are up 4.5 percent vs. the comparable period last year.
The advance report for restaurants and bars, which reported sales up 0.1 percent in February over January, was revised up to +0.3 percent.
Overall, the March sales report was very encouraging.
There are some considerations to bear in mind when looking at this data. The Bureau labels the data as an “advance” report since it is based on a small initial response. The Bureau may revise the findings when a larger sampling is received.
Not surveyed are hotels, motels, resorts, retailers (supermarkets, convenience stores, etc.) employee feeding, healthcare, colleges, Schools K-12 and military feeding. Thus, 30 percent - 40 percent of the industry sales are not included in the study.
Some of the sales figures are adjusted for holidays, weekends and seasonal variations but none of the data is adjusted for menu price changes.
Economic News This Week
- Initial jobless claims fell 5,000 to 196,000 for the week ending April 13. The last time the number of initial claims were lower than that was Sept. 6, 1969. The 4-week moving average declined by 6,000 to 201,250. The last time the 4-week average of claims was this low was Nov. 1, 1969. When you have to track back almost 50 years to find fewer claims, it is a strong indication that the job market is thriving.
- The Conference Board Leading Economic Index increased 0.4 percent in March to 111.9. The index was up 0.1 percent in February and was unchanged in January. The Conference Board spokesman noted the significant March increase in the index but said overall it has been trending lower and the board expects the U.S. economy to decelerate by the end of the year.
- The New York Federal Reserve’s Empire State Manufacturing Survey showed business activity grew modestly in April. The index rose 6.4 points to 10.1. (Any reading over zero indicates increasing activity.) The New Orders Index rose 4.5 points to 7.5 but the Unfilled Orders Index fell 2.9 points to minus 0.7. The Shipments Index increased 0.9 points to 8.6. The Number of Employees Index decreased 1.9 points to 11.9 while the Average Employee Workweek Index rose 7.7 points to 4.3.
- The Philadelphia Federal Reserve’s Manufacturing Business Outlook Survey showed mixed results for April. The index fell from 13.7 in March to 8.5 in April. (Any reading over zero indicates increasing activity.) Thus, the manufacturing business continues to grow in the Philadelphia region but at a slower rate than in March. The New Orders Index showed a significant increase from 1.9 in March to 15.7 while the Unfilled Orders Index declined from 3.1 to 0.4 this month. The Shipments Index edged down from 20 to 18.4. Both employment readings increased. The Number of Employees Index rose to 14.7 from 9.6 while the Average Employee Work Week Index increased from 10.6 to 11.2.
- Industrial production edged down by 0.1 percent in March. Manufacturing production was unchanged in March. The utilities index rose 0.2 percent while the mining index was down 0.8 percent. Capacity Utilization for the industrial sector decreased 0.2 percentage points in March to 78.8 percent, a rate that is 1.0 percentage point below the long-run (1972-2018) average.
- March privately-owned housing starts fell 0.3 percent from February and declined 14.2 percent from March of last year. Building permits issued for privately-owned housing units fell 1.7 percent from February and dropped 7.8 percent from March 2018. The data continues to indicate softness in the housing market.
Foodservice News This week
- Boston’s Pizza Restaurant & Sports Bar unveiled a new design with significant upgrades. The redesign offers more flexibility in adapting to smaller sites to reduce franchisees’ costs. It also features improved technology, upgraded patio spaces with fire pits and much more. Restaurants with the changes have seen revenue increase as much as 22 percent according to Boston’s Pizza. In addition, Boston’s Pizza will introduce a new menu this year.
- Technology is critically important for restaurants according to a survey by the National Restaurant Association. When asked if restaurant tech — smartphone apps, tableside tablets and ordering kiosks — 60 percent of adults agreed. That increased to 70 percent among those 18 to 34. Further, the study found that if restaurants were not delivering the information consumers wanted at the moment, consumer would dismiss that restaurant.
- Chick-fil-A will build its first company-owned distribution center. The facility will be located in Bartow County, Ga., about a 45-minute drive from downtown Atlanta. Chick-fil-A projects the distribution center will have approximately 300 employees.
- Members of the Graham family are in talks to buy The Clyde’s Restaurant Chain. The Graham family are former owners of The Washington Post.
- Corporate Stirrings: J.Alexander’s holdings rejected a takeover offer from Ancora Advisors. J.Alexander’s management group, which currently owns about 9.0 percent of the chain’s stock, responded that the buyout offer was inadequate and defended the performance of the multibrand restaurant operation. Diversified Restaurant Holdings was unsuccessful in its attempt to buy 9 Buffalo Wild Wings locations in the Chicago area when its franchiser, Minneapolis-based Buffalo Wild Wings Inc., took advantage of its right of first refusal to a acquire the 9 restaurants. Diversified Restaurant Holdings remains one of Buffalo Wild Wings largest franchisees with 64 units. A rumor is circulating that the 34-unit Kona Grill chain may file for bankruptcy.
- Growth Chains: Godiva, the Belgian confectioner, plans on opening 2,000 shops in the next 6 years with one third of them in the U.S. Boston’s Pizza Restaurant & Sports Bar will open 6 locations this year. Cava Grille plans to open 10 locations in the first half of 2019. Mighty Quinn’s Barbecue has signed a franchise agreement for 4 restaurants in Queens in New York City.
- Comparable Store Sales Reports: Luby’s (All concepts down 3.3 percent, Luby’s Cafeteria down 2.2 percent. Fuddruckers down 5.3 percent and Cheeseburger in Paradise down 3.1 percent.)
For details and same-store sales of other chains, click here for the latest Green Sheet.