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December 7, 2016

Technomic Pares Operator Sales Forecasts For 2016, 2017

The slowdown in restaurant sales and traffic, particularly at major chains but also in other key segments, has led the Chicago-based foodservice research firm Technomic Inc. to lower its forecast of sales growth for both 2016 and 2017.

“It’s pretty apparent that there’s some softening in certain parts of the industry,” Technomic Senior Principal David Henkes wrote in sending FER the revisions, which were released to Technomic customers in November. The firm now expects total industry nominal sales growth to be 4.1% this year and 4.2% in 2017. This compares with the preliminary forecast released last May of 5% nominal growth for 2016 and 4.9% for 2017. Real changes after factoring out inflation are now forecast at 1.6% for 2017 and 1.7% for 2017 compared with the earlier forecasts of 2.4% and 2.3% respectively. The firm forecasts menu-price inflation of 2.7% for commercial segments in both years.

The biggest revisions in growth rates are in the restaurant segments and lodging foodservice. Technomic cut the nominal forecast for limited-service restaurants, which includes both traditional quick-service and fast-casual concepts, to 4.5% for 2016 and 4.8% for 2017 from the previous 5.5% and 5.7% forecasts. The forecast for full-service restaurants was pared even more to 3.5% growth for both years from the previous forecast of 4.9% for 2016 and 4.3% for 2017. The forecast for lodging foodservice nominal growth was lowered to 5.3% in 2016 from 7.3% in the previous forecast and 5.1% next year from the original 6.8%.

In commenting on factors that led the firm to revise the forecasts, Henkes noted the following:

•     Casual dining, particularly the larger chains, has seen a fairly large decline in traffic, and many chains are reporting declining same-store sales. (This is a big part of the “restaurant recession” that the press has noted.) At the same time, we do believe independents are relatively strong and healthy, although perhaps not to the degree from 12 to18 months ago.

•     Fast casual is reaching maturation, with public chains also showing slowing same-store sales growth. Continued trouble at industry leader Chipotle doesn’t help.

•     Menu price inflation continues to make dining out relatively less attractive compared to eating at home; this is certainly impacting the frequency of dining out for many consumers.

•     Continued competition from other outlets, including c-stores, supermarkets, meal kits and other “non-traditional” areas have impacted restaurant sales.

Further information on the forecast and on other Technomic research can be found at www.technomic.com. 

December 7, 2016

NRA Partners With Multicultural Foodservice & Hospitality Alliance

The National Restaurant Association marked a major milestone in its commitment to promoting and elevating diversity in the restaurant industry by welcoming the Multicultural Foodservice & Hospitality Alliance (MFHA) to the Association.

Founded in 1996, MFHA is a non-profit organization and educational resource on multicultural diversity issues for the restaurant, foodservice and lodging industry. “Since our inception, the NRA and the NRA Educational Foundation have supported MFHA’s mission to increase cultural awareness and advance diversity throughout the hospitality industry,” says Gerry Fernandez, MFHA founder and president.

In addition to advocating for career opportunities for people of color, MFHA is developing Cultural Intelligence training modules that help the industry improve business results in culturally diverse markets. NRA members will have full access to these Cultural Intelligence solutions, webinars, conferences, roundtables and consultation services.

 

December 7, 2016

Starbucks CEO Schultz Moves Aside To Lead High-End Store Initiative

Howard Schultz is stepping down in April as chief executive of the Starbucks Corp. so he can lead the company’s new strategic initiative to build high-end coffee shops. He will remain chairman of the 45-year-old Seattle chain.

Schultz will be succeeded by President and Chief Operating Officer Kevin Johnson, who served on Starbucks’ board for several years before joining its executive team two years ago. Schultz, who began handing off daily oversight of the 25,000-unit chain a few months ago, says he has no plans to step away from the company.

Starbucks’ move toward high-end coffee is aimed at refreshing its brand, which has been facing increasing competition from specialty roasters such as Intelligentsia and from mass coffee purveyors like Dunkin’ Donuts. ​Two years ago, Starbucks opened the Seattle Reserve Roastery and Tasting Room, a 15,000-sq.ft. store where customers can buy $12 cups of small-batch “reserve” coffees made with a siphon brewing technique. The company is planning to open 20 to 30 more of the high-end stores, including one twice its size in Shanghai next year. Also on the drawing board are up to 1,000 smaller stores similar to the Roastery, minus the on-site roasting, under the “Starbucks Reserve” brand.

Starbucks is also remodeling many of its stores with Reserve-branded coffee bars.

December 1, 2016

New Partnership Forged By Florida, Indiana Dealers

Foodservice equipment dealer Johnson-Lancaster and Associates, headquartered in Clearwater, Fla., has partnered with Indianapolis-based Schert Foodservice Equipment to form Lancaster-Schert Equipment, LLC. This strategic partnership, announced December 1, will expand Johnson-Lancaster’s presence in the Midwest; the dealership, founded in 1980, already has regional offices in Maryland and Ohio.

The deal will boost Schert’s buying power and capital. The four- year-old firm will continue to manage inventory and service equipment for its K-12 school customers; equipment sales now will go through the newly formed LLC.

Johnson-Lancaster Owner Brad Lancaster will take on a board member role in the newly formed company; Adam Schut will serve as president of Schert and Lancaster-Schert.