Alicia Kelso - 10 Minutes News for Hoteliers - Page 4

5 min

Small chains and independents ramp up their catering programs

🍴 Restaurant catering has outpaced industry growth by 50%, with both large chains and independent establishments like Mario's Pizzeria and Porano augmenting their services. A report by Channel Media Group reveals 90% of businesses plan to cater from local restaurants during holidays. Killer Burger partnered with ezCater, presenting a "Killer Box" with 12 burgers, while Asian Box's catering, vital for profitability, returned to 2019 levels. Angry Chickz launched catering, seeing it as an opportunity for growth and brand loyalty. World Wrapps' early sales can reach $1,000-$5,000, significantly impacting ROI. Catering sales could increase by 30% with office occupancy rising from 33% to 50%.

2 min

New York City landmark Gotham Restaurant closes for good

🏩 Gotham Restaurant in New York City closed permanently after 40 years of operation. In July, its parent company, Gotham Restaurants LLC, filed for Chapter 11 bankruptcy in the Southern District of New York, with nearly $484,000 owed to the New York State Department of Taxation Finance and additional debts to suppliers, credit card and utility companies. A cyberscam in June cost the restaurant $45,000, affecting payroll. The restaurant, known for inventing "tall food," opened in 1984 with Alfred Portale, who left in 2019.

2 min

Menu prices stabilized at a more moderate pace in October

💸 The Consumer Price Index in October increased by 0.2% and is up 2.6% year-over-year. Food costs rose 2.1%, with food prices overall up 2.3% year-over-year in September. Food-away-from-home prices soared 3.8% year-over-year compared to a 1.1% rise for food-at-home. October marked 20 consecutive months where restaurant pricing exceeded grocery pricing, with a 270 basis point gap noted by Kalinowski Equity Research. The U.S. restaurant industry may see 2024 as the worst same-store sales year since 2016.

3 min

Gen Z’s lack of brand loyalty presents a challenge for restaurants

💰 Gen Z (12-27 years old) is projected to have $12 trillion in spending power by 2030, becoming potentially the wealthiest generation. Yet, their brand loyalty wanes, with a 4% and 1% drop in affinity for top restaurant brands Chick-fil-A and McDonald's, respectively, while Starbucks experienced a 6% decrease since the previous survey six months prior. Despite the declines, Gen Z's spending increased by 6% year-over-year and 2% since spring. Their intent to return to quick-service restaurants is 33% and to recommend is 29%, which is the lowest across generations. Historically high prices and third-party delivery services like DoorDash are contributing to diluted brand loyalty. Fast food is now seen as a "luxury" by 80% of consumers. However, opportunities remain as Gen Z prefers dining out, with chicken tenders and customizable meals, and values seamless digital experiences with variety and value deals.

2 min

Wild Eggs has acquired St. Louis-based Crazy Bowls & Wraps

🍳 Wild Eggs, established in Louisville in 2007 with 16 locations, acquires St. Louis-based Crazy Bowls & Wraps (founded in 1994 with 16 stores). A Wild Eggs site in Louisville, KY, will serve as a Crazy Bowls & Wraps virtual kitchen from 4 p.m. to 10 p.m., leveraging third-party delivery for bowls, wraps, and salads. PG Growth Opportunities Fund bought Wild Eggs in early 2023, aiming for regional presence and nationwide expansion. The merger offers new franchising opportunities in eight states for both brands.

2 min

The pricing gap in favor of grocery stores shrunk in September

💸 In September, inflation rose by a seasonally adjusted 0.2%, with an annual rate of 2.4%. Food prices increased by 0.4%, contributing to a 2.3% year-over-year rise. Food-away-from-home prices saw a 3.9% annual increase and a 0.3% monthly rise, while grocery/supermarket prices were up 1.3% from the previous year. Menu inflation has outpaced grocery prices for 19 consecutive months, with a 260 basis point gap favoring grocery stores in September. According to Circana, 86% of American eating occasions were home-sourced over the past year. Dining out costs four times more than eating at home, affecting restaurant visits and sales.

1 min

At José Andrés’ restaurants, desserts are personal

🍳 José Andrés and partners have developed the José Andrés Group over 25 years, now featuring nearly 40 concepts across Chicago, Vegas, LA, Miami, NYC, Orlando, DC, The Bahamas, and Dubai. Vegas restaurants like China Poblano offer unique desserts such as the Giggling Buddha, and Jaleo's top dessert is Andrés' mom's traditional flan.

3 min

Fifth Group Restaurants focuses on balancing business with art

🍕 Steve Simon and partners opened South City Kitchen in Atlanta in 1993. They expanded with three coffee shops in 1994 but exited the venture three years later. Fifth Group Restaurants was formed, with South City Kitchen as its flagship. The group includes various cuisines like contemporary Mexican at Alma Cocina and modern European at Ecco. Simon emphasizes differentiation in dining experiences to attract and retain customers. The company's steady growth includes licensing three locations in the Atlanta airport and potential expansion into Dallas. Fifth Group also focuses on sustainability and cost-effectiveness. Simon highlights no set targets, favoring slow and steady growth.

2 min

The gap between restaurant and grocery prices widened in August

🍴 The Consumer Price Index data shows menu prices increased by 0.3% in August 2023, slightly up from July's 0.2%. Year-over-year, food-away-from-home prices rose 4%, compared to 4.1% in July. Limited-service meal prices rose 4.3% and full-service meals 3.8% over the last 12 months. Food-at-home prices remained flat in August after a 0.1% increase in July, with a year-over-year rise of 0.9%, marking 17 months that restaurant prices have outpaced grocery prices. The pricing gap between grocery and restaurant inflation is now 310 basis points, nearing the 390 basis points in 2016, according to Mark Kalinowski of Kalinowski Equity Research.

2 min

Restaurants experience their largest monthly employment gain this year

📍 In August, the U.S. restaurant industry added nearly 30,000 jobs, marking a 21% share of the 142,000 total new positions in the economy. Unemployment dipped to 4.2%. The sector now employs 12.4 million, slightly above February 2020's 12.3 million. Full-service still lags 4% behind pre-pandemic levels, while limited-service is up 3%. Despite this growth, 82% of restaurant operators are hiring, seeking chefs (30%), dishwashers (12%), cashiers (7%). Operating costs and labor shortages are top challenges, with 27% of respondents citing costs and 23% labor issues. Toast found 30% of restaurant workers might leave within two years, though the quit rate is below the pre-pandemic average.

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