Forbes ran a story recently on how delivery is changing the restaurant business. The story seems to have been inspired by the recent study by the National Restaurant Association, which found that close to 60 percent of restaurant sales now come from delivery, takeout, drive-thrus and prepared items from supermarkets and c-stores.

The Forbes article quotes Hudson Riehle saying that there is a “confluence of influences” driving the change. First and foremost is a demographic change with Generation Z bringing their tremendous spending power and preference for technology to bear on the delivery market.

It is certainly true that technology is a factor in the changes taking place with big leaps in areas like portable communication devices, voice recognition, and new delivery tools like driverless cars and drones.

But it is important to recognize that consumers’ desire for takeout and delivery service is older than most of the people reading this. Pizza operations and Chinese food are just two examples that started in the last century.

Economic News This Week

  • Initial-jobless claims fell 10,000 to 210,000 from the previous week for the week ending October 10. The 4-week moving average increased 1,000 from the previous week to 213,750.
  • The Producer Price Index for Final Demand decreased 0.3 percent in September following a 0.1 percent increase in August and a 0.2 percent increase in July. In the last 12 months the index for final demand has risen 1.4 percent. The Producer Price Index for final demand goods fell 0.3 percent in September while the Producer Price Index fell 0.2 percent for final demand services. The Producer Price Index for Foods rose 0.3 percent in September.
  • The Consumer Price Index remained unchanged in September from August. In the 12 months ending in September the index rose 1.8 percent. The index without the volatile food and energy categories was up 0.1 percent in September and up 2.4 percent in the last 12 months ending in September. (For September food prices, please see the Foodservice News This Week section below.)
  • The Federal Reserve reported consumer credit increased 5.25 percent in August on a seasonally adjusted annual basis. Revolving debt – mostly credit card debt – decreased at annual rate of 2.25 percent. while nonrevolving credit – auto loans, student loans, boat loans, etc. — increased at an annual rate of 7.75 percent.

Foodservice News This Week

  • The Consumer Price Index reported that food prices rose 0.1 percent in September. Over the past 12-month period ending in September, food prices rose 1.8 percent. September Food at Home Prices were flat vs. August while Food Away from Home prices increased 0.3 percent in September. In the last 12 months ending in September, Food at Home prices rose 0.6 percent but Food Away from Home prices shot up 3.2 percent, the second largest increase of any item on the CPI.
  • Newk’s Eatery announces a new restaurant prototype. The new design is described as contemporary and comfortable with updated light fixtures, new countertops and millwork, tufted booths, hardwood accents, new plate ware and menu boards. There is also a new updated beverage station offering Newk’s iced tea and lemonade. The new exterior has new awnings, string lights and a dining patio.
  • New rule proposed to allow pooling tips. The Trump administration would like to change a rule from the Obama administration that tips can only go to the tipped individual. Many foodservice managers and owners would like to see waitstaff share tips with food runners, bussers, bartenders, line cooks and others who weigh in on the guest experience. A similar attempt to revise the labor regulations failed in 2017 when critics charged the rule would allow management to keep the tips for themselves.
  • Gordon Foodservice announces their intention to build a 500,000-square-foot distribution center in Westfield, Ind. The facility will serve the greater Indianapolis market and is projected to open in late 2021.
  • Raley’s is testing a new foodservice concept that includes a coffee shop in partnership Chocolate Fish Coffee Roasters. The new concept is located in Folsom, Calif.
  • The dunnhumby Retailer Preference Index announced its ranking of top U.S. c-store chains. The index ranks chains on a combination of financial performance and consumer emotional connection. Here are the results: (1.) QuikTrip, (2.) Wawa, (3.) Sheetz, (4.) Kwik Trip/Kwik Star, (5.) RaceTrac, (6.) Casey’s General Stores, and (7.) Maverik.
  • Corporate Stirrings: Inspire Brands plans to add the 2,800-unit Jimmy John’s Sandwiches to its portfolio by the end of October. Inspire currently owns Arby’s, Buffalo Wild Wings, Rusty Taco and Sonic Drive-In. Yesway will buy Allsup’s Convenience Store Chain. Known for its deep-fried burrito, Allsup’s has 300 stores in New Mexico, Oklahoma and West Texas. Terms of the acquisition were not disclosed.
  • Growth Chains: McAlister’s Deli has signed a development agreement with Best Choice Restaurants, an affiliate of Sun Holdings Inc., for 98 units. West coast Salt & Straw will open 2 locations in Southern Florida. Johnny Rockets, which currently has more than half of their units outside the U.S., will open 15 international locations this year and add as many as 30 more next year. Tropical Smoothie Cafe has a goal of reaching 1,500 locations; currently the chain has more than 800 units, with more than 150 franchise agreements this year. Checker’s, which pulled out of the Las Vegas market, is coming back under the Rally’s name with in conjunction with the chain’s Los-Angeles franchisee. The plan calls for opening 5 units in he next 18 months and 20 in the next 5 years.
  • Comparable Store Sales Reports: Domino’s Pizza (U.S. up 2.4 percent, company owned up 1.7 percent and franchised up 2.5 percent)

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