The three largest foodservice distributors reported increased sales measured as both dollars and cases for their most recent fiscal quarter. All comparisons are against the comparable period last year.
- Sysco’s U.S. sales increased 2.7 percent for a total of $10.7 billion. Local case volume within domestic broadline operations grew 1.4 percent, of which 1.3 percent was organic. Total case volume within U.S. broadline operations grew 0.4 percent, of which 0.3 percent was organic.
- US Foods’ sales grew 4.6 percent for a total of $6.4 billion. Total case volume increased 1.7 percent, while independent restaurant case volume increased 4.6 percent.
- Performance Food Group’s sales increased 28.4 percent for a total of $5.9 billion. (Excluding Eby-Brown, case sales increased 7.7 percent.) Total case volume increased 9.2 with organic growth of 2.9 percent. Independent case volume rose 4.9 percent.
The volumes these distribution giants generate serve as a good indication that foodservice operators continue to experience sales growth, too. It is possible, but not very likely, that the major distribution players are increasing their sales at the expense of smaller distributors.
Economic News This Week
- Initial-jobless claims dipped by 12,000 for a total of 209,000 for the week ending August 17, 2019. The 4-week moving average increased by 500 claims to a level of 214,500.
- Existing home sales increased 2.5 percent in July from June. Home sales were 5.39 million on a seasonally adjusted annual basis. Sales are up 0.6 percent from July 2018. The National Association of Realtors says lower mortgage rates continue to help boost sales but there is a shortage of lower priced homes available.
- July new home sales totaled 635,000 on an annual, seasonally adjusted basis, per the U.S. Census Bureau and the Department of Housing and Urban Development. The estimate marks a 12.8 percent decline from the June new homes estimate but a 4.3 percent from July 2018.
- Employment numbers revised for May and June. A couple of weeks ago we carried a story noting significant changes in the Census Bureau’s retail statistics. This week it was the Bureau of Labor Statistics’ making changes to their employment figures. The change in June was a reduction from +224,000 to +193,000 while the count from May was changed from +72,000 to +62,000. This means a total reduction 41,000 jobs for the 2 months.
- The Conference Board’s Leading Economic Index increased 0.5 percent in July after a 0.1 percent decline in May and June. Based on these results, the Conference Board expects the economy to continue to expand in the second half of this year.
Foodservice News This Week
- The National Restaurant Association predicts industry sales will reach $863 billion in 2019. This marks a 3.6 percent increase over last year. Driving eating out sales are the tax cuts and the strong job market. The only factor that derail foodservice would be a softening of the job market and analysts believe that is highly unlikely.
- Is it really a burger? This year’s hottest menu trend is plant-based non-meat items like the Impossible Burger. But the Arkansas legislature passed a statute that forbids the marketing of plant-based products as hot dogs, burgers or even bacon. A company that markets a line of plant-based products and goes by the name Tofurky challenged the law in court. Tofurky claims, among other things, the packages make it fully clear its products are not meat and, further, the company has a First Amendment right to name its products as it sees fit. It will be interesting to see if the state of Arkansas or Tofurkey prevails in the court system.
- Casey’s General Store introduces a larger concept. The new c-store design measures 6,000 square feet, just about double the size of most Casey’s current locations. The new operation will have a full-serve kitchen, a more extensive menu and more seating.
- In-N-Out Burger will build a 97,900 square-foot distribution facility in Colorado Springs as well as 150,00 square-foot office building. The investment is to support the burger chain’s entry into the state.
- Domino’s will open a new space to house its cross-functional teams that develop cutting edge technology. Called Domino’s Garage, it is located at Domino’s Farms in Ann Arbor, Mich. The new 33,000-square-foot, 2-story building has an open design and will have space for testing delivery innovations like GPS delivery tracking experience as well as autonomous delivery vehicles.
- Minneapolis City Council voted to ban construction of new drive-thru operations. The new law does not apply to existing drive-thru operations. Drive-thru businesses had already been banned in 15 of the city’s 21 zoning districts. The goal of the legislation was to reduce air pollution.
- Corporate Stirrings: Yum China Holdings announced it has a definitive agreement to acquire a controlling interest in the Huang Ji Huang group, a leading Chinese style casual dining franchise business with more than 640 restaurants. Valluzzo Companies, a Baton Rouge, La.-based McDonald’ franchisee purchased 15 McDonald’s restaurants from Santiago Negre, a McDonald’s franchisee in Alabama. Financial terms were not provided.
- Growth Chains: FAT Brands will open five co-branded FAT Burgers and Buffalo Express locations in Pakistan. Bar and taco concept Agave & Rye plans to have 100 locations in the Midwest. The Wawa c-store chain will open two stores in New Jersey. Saladworks should open 20 franchises by the end of this year and projects a 20 percent - 30 percent increase in franchises by the end of 2020.
- Comparable Store Sales Reports: Ark Restaurants Down 1.5 percent, Bloomin’ Brands (Combined up 0.6 percent, Outback Steakhouse up 1.3 percent, Carrabba’s down 1.6 percent, Bonefish Grille up 0.1 percent and Flemming’s up 1.6 percent), Brinker’s International (Chili’s Company Owned up 1.5 percent, Chili’s Franchised up 0.9 percent & Maggiano’s down 0.2 percent), Del Taco (System up 2.2 percent, Company Operated up 1.7 percent and Franchised up 2.8 percent), Diversified Restaurant Holdings up 5.8 percent, FAT Brands up 0.7 percent, Freshii Inc. up 4.0 percent, Shake Shack up 3.6 percent and Steak n’ Shake down 5.9 percent.
For details and same-store sales of other chains, click here for the latest Green Sheet.