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Things You Should Know (The Most Important News)...
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Food Service Holdings Promotes Gilbert And Crider
Food Service Holdings, the Denver-based parent of BSI, English Manufacturing and Colorado Custom Stone, has promoted two of its senior executives. Stephanie Luros-Gilbert has been named executive vp, corporate growth strategy, and Mike Crider becomes executive vp, operations.
Luros-Gilbert will spearhead commercially facing efforts for FSH, and oversee strategic initiatives focused on accelerating growth within the organization, while maintaining her previous responsibilities as vp of sales and marketing. Crider most recently held the position of vp of operations, where he managed all facets of the manufacturing process. In his new role, Crider adds the engineering and custom fabrication project-management departments to his portfolio.
“Stephanie and Mike’s promotions were well deserved and more accurately align with our corporate vision and long-term goals as we continue our strategic growth efforts.” said Bill Reeves, CEO of Food Service Holdings. BSI: Luros-Gilbert And Crider Promoted
Luros-Gilbert is a well-known exec in the foodservice equipment market. She joined FSH in January 2020 after serving as national sales manager, consultant services, at ITW Food Equipment Group. She’s active in many industry associations including FCSI, AHF, SHFM and MAFSI. Crider has been at FSH for 13 years in manufacturing and operations roles.
E&S Companies/Manufacturers; People
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Amid New Covid Surge, Germany, Central Europe Lock Down
A fourth wave of the Covid pandemic is surging in Europe, leading several central European countries to reimpose strict lockdowns and restrict dining at restaurants entirely or only to those customers can prove they are vaccinated. In some cases, the restrictions are prompting protests that have turned violent. NYT: Europe’s Covid Surge
The countries most affected include Austria, the Czech Republic, Slovakia and Slovenia, as well as more eastern countries such as Romania and Bulgaria. Parts of Germany are also seeing rising caseloads, leading to new restriction triggers, and in some case more restrictions. Each of Germany’s 16 states has control of local public health measures. Limited restrictions in the Netherlands have led to riots in Rotterdam and other Dutch cities. So far, France, Italy and the UK are not as affected by the surge. Food Service: Germany prepares for new Covid restrictions ; Food Service: German Fed. Gov't. & State Agree On Restriction Triggers; Food Service: As Covid Limits Evolve, FS Assns. Cautious; Food Service: Restaurateur Discusses Austrian Covid Restrictions
As in the US, the new pandemic wave impacts mostly the unvaccinated. And as also is true in the US, vaccination rates vary among the countries, with those with the lowest rates seeing the largest upticks in cases, hospitalizations, and deaths. WSJ: Uneven Vaccine Rollout Threatens Europe. The surge has also prompted the US CDC to issue “avoid travel” warnings for four central European countries. Forbes: CDC Expands Level 4 "Avoid Travel" Warnings
The frustrations with the surge and the new restrictions are widespread, with some anger directed at the governments imposing the restrictions and in other cases, it’s a matter of the vaccinated railing at the unvaccinated. The German Health Minister, Jens Spahn, was widely quoted this week saying that by February, Germans will be “vaccinated, recovered (from a Covid bout, and thus possessing some natural immunity), or dead.” That puts it about as plainly as anyone could.
Of course, we have our own continuing issues in the US, with continuing cases mostly among the unvaccinated and in those states with low vaccination rates. Another surge appears to be underway. See here NYT-The Morning: Latest US Covid Surge and accompanying chart.
Regulations; Market Trends/Operator Trends; Global
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Pending Court Reviews, OSHA Suspends Enforcement Of Private Company Vaccine Mandates
Enforcement of vaccine mandates by the federal Occupational Safety & Health Administration at companies with 100 or more employees has been suspended, as federal courts assess the legality of the mandates. OSHA is following orders from the US Fifth Circuit Court of Appeals in New Orleans not to enforce the mandates under the “Emergency Temporary Standard” OSHA had previously issued.
The vaccine mandates would require all employees in such larger companies to be fully vaccinated against Covid or submit to weekly testing as of Jan 4, 2022. A reported 34 companies have sued the government, and the Sixth Circuit US Court of Appeals in Cincinnati has been assigned the cases. OSHA is based in Cincinnati. CSA: OSHA Suspends Large Business Vax Mandates. You can see OSHA’s suspension announcement here: OSHA: Suspending Emergency Temporary Standard
Chain Store Age cites a labor regulation lawyer, Keith Wilkes, saying, “The ultimate fate of the mandate will most likely be decided by the US Supreme Court. Although the highest court has a conservative majority, it has yet to interfere with COVID-19 vaccination mandates.”
Regulations
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Latest Datassential Consumer Research On Covid Concerns, Behavior Show Mixed Signals
We like to share the monthly updates of Datassential consumer research on consumer attitudes and behaviors surrounding Covid. In the latest survey from early November, those very concerned about Covid crept up to 51%, a number significantly below that of the worst of the pandemic, but still signifying a majority of Americans remain concerned.
The demographic groups, however, are behaving somewhat differently, with highly vaccinated Baby Boomers apparently less concerned about eating in restaurants and young Gen Zs also avoiding dine-in less often than other cohorts. You can see the long-term trends in the charts accompanying. Datassential: Covid Update 11-12-21. You can see all Datassential’s Covid-related consumer research here: Datassential: Covid Updates
The numbers show concern about Covid and that there is continuing impact on dining in restaurants. That the concern is increasing is never a good sign.
Market Trends/Consumer Trends, Operator Trends
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Jobs Growth Was Dramatically Undercounted Over The Summer; Unemployment Claims Continue To Fall
Jobs growth in the US was much stronger over the summer than first reported, according to revisions from the Bureau of Labor Statistics. Since the BLS released its October report Nov. 5, a total of 626,000 more jobs were discovered in the four-month period from June through September than first reported. It was the largest undercount of any comparable period since 1979. As the Washington Post put it, “If those revisions were themselves a jobs report, they’d be an absolute blockbuster.”
The BLS always revises the monthly data twice. Businesses just seem to have been too busy dealing with the economic surge over the summer to fill out the survey. WashPo: Jobs Growth Dramatically Underestimated; BLS: Jobs Report 10-21; BLS: Monthly Employment Growth Revisions 11-23-21
Meanwhile, weekly unemployment claims and the number of Americans collecting unemployment benefits have continued to consistently fall, as employers are in an “all-hands-on-deck” situation and nearly all emergency pandemic assistance programs at both the federal and state levels have ended (see accompanying charts.). DOL: Weekly Claims For Unemployment
As the Washington Post also points out, this revision changes both the economic and political narratives of the summer. The weak initial jobs growth in August and September were cast as a dramatic slowdown by most economists and journalists (including me, by the way), and used by Republicans to “prove” Biden’s relief and stimulus agendas were failing. In fact, the strong growth over the summer was consistent with other months coming out of the pandemic, and the ending of unemployment benefit support didn’t seem to affect the numbers at all.
Market Trends/Economic Trends
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Chain News: RBI To Buy Firehouse Subs, FAT Brands Picks Up Another Small Chain, Sweetgreen and Portillo’s IPOs
In these days of soaring prices, supply chain issues and ongoing Covid, I often don’t get to the constant chain news. Here’s just a smattering of things I didn’t cover during the past couple weeks:
--Restaurant Brands Intl. the Toronto-based owner of Burger King, Tim Hortons and Popeyes, said it will buy Firehouse Subs, the Jacksonville, Fla., chain, for $1 billion in cash. Firehouse is expected to finish the year with 1,200 units and nearly $1.1 in systemwide sales. RBI reported same-store sales are running 20% above 2019 levels. RBI: To Acquire Firehouse Subs In All-Cash Deal; QSR: Firehouse Subs Plots Growth Post RBI-Deal; WashPo: RBI Surprises Some With Firehouse Subs Deal
--FAT Brands, the chain conglomerate based in Beverly Hills, Calif., will buy another small chain, Native Grill & Wings, a 23-unit concept based in Phoenix. It’s FAT Brands’ third wing concept and fourth acquisition in the past six months. The deal is for a reported $20 million in cash and is expected to close next month. NRN: FAT Brands To Buy Native Grill & Wings; FAT Brands: Will Acquire Native Grill & Wings
--Investor- and celebrity-darling Sweetgreen, the 140-unit better-food chain based in Los Angeles, went public last week and raised at least its target of $313 million. The first day of trading, shares soared 76% from the initial offering price of $28 to about $49 a share. On Nov. 23, it was trading above $45 a share. The chain is not profitable yet, one of its founders said last week. NRN: Sweetgreen Goes Public, Does Well First Day; Sweetgreen: Prices IPO at $28 A Share
--Portillo’s, the Chicago-based fast-casual which went public earlier this month, saw its shares fall after it released its first quarterly earning report, covering 3Q-21. Rising beef and labor costs are cutting into its margins. Yahoo!/Chicago Tribune: Portillo's Shares Fall After First Quarterly Report; Portillo's: 3Q-21 Initial Quarterly Report
The RBI-Firehouse Subs is a big deal, showing it’s not just smaller concepts that are being scooped up coming out of the pandemic. In a segment with several strong newer players, including Jersey Mike’s, Firehouse is doing very well indeed, and somewhat quietly. And note that while RBI is public and probably could have done a stock deal, it is paying $1 billion cash for the chain. That’s a wow! And it just shows how cheap money is.
FAT Brands is building an interesting conglomeration of brands. It just bought Fazoli’s. I’m not sure what the end-game is there, but what do I know? Nearly all of its concepts are profitable.
Sweetgreen has garnered a lot of press for a very long time, and has often been considered the new Shake Shack from an investor “let’s bet on an emerging chain” standpoint. It is a good concept.
Portillo’s went public to raise money for expansion and is notable for its remarkable $8 million average unit volumes. All operators’ margins are being squeezed by rising food and labor costs. It was actually not a bad report. Hey, it’s profitable!
Operators/Chain & Commercial Operators; Deals & M&A
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Consumer Sentiment Continued To Plunge Mid-Month
The University of Michigan’s Consumer Sentiment Index fell to its lowest level in a decade in mid-November as worries about rising prices and the growing belief among consumers that there are no effective policies to slow the increases. The widely followed Sentiment Index fell almost five points from the final October level to 66.8 from 71.7. The Consumer Expectations Index fell by a similar number. According to Chief Economist Richard Curtin, “Half of all families anticipated reduced real incomes next year,” and “Rising prices for homes, vehicles, and durables were reported more frequently than any other time in more than half a century.” UM: Consumer Sentiment
That Consumer Sentiment is now lower than during the depth of the pandemic is almost unbelievable. It underlines the economic uncertainty rising prices creates, and that the main emotion this uncertainty creates is fear. Economists’ arguments that the increases appear “transient” is no help to those paying 50% more to fill up their gas tanks.
By the way, the final November reading of the index will be released at 10 a.m. ET today, Nov. 24, early because of the Thanksgiving holiday. You can check how it came out at the link above.
Market Trends/Economic Trends, Consumer Trends, Commodity Price Trends
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Gasoline Prices Continue Stable As Crude Oil Prices Fall
After the surging increases of late summer and early fall, gasoline prices in the US have been stable for nearly a month. As of Nov. 23, the average price of a gallon of regular was down a penny from last week and only two cents higher than a month ago. The reason is simple: After crude-oil prices surged on OPEC+ production restrictions to more than $80 bbl. for West Texas Intermediate crude, the US benchmark, they had fallen to less than $76 bbl. AAA: Gas Prices; Oilprice.com: Oil Price Charts
The US, in tandem with a number of other leading oil and gasoline consuming countries, including China, India, and the UK, released crude oil from its Strategic Petroleum Reserves Nov. 23. In the goofy way markets work, after first falling, crude oil prices rose after the announcement. Commodity prices, especially the one that’s still most important, are always an adventure.
Market Trends/Economic Trends, Consumer Trends, Commodity Price Trends
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In Memorium: Marius “Pepe” Griffo, Long-Time Traulsen Sales Exec, Passes
Our friend Michael Posternak, chairman of rep firm PBAC & Associates, and once vp of sales and marketing at Traulsen, now owned by ITW Food Equipment Group, sent us the following e-mail Nov. 15. It has been edited slightly:
“My heart is broken in having to inform you of the passing of our dear friend and mentor to so many of us, Pepe Marius Griffo, age 82. Pepe passed away a few weeks ago….
“Pepe’s dedication to Traulsen was a large part of the foundation that the brand is built upon. He worked as a draftsman for the Tysen family that owned Tafco in Pittsburgh. He moved to LA in the early 1970s to the San Fernando Valley and joined Fred Schmidt Associates, (one of the pioneering foodservice consulting firms.) From there he joined Traulsen as a Southern California salesperson, where he soon became district and then regional sales manager.
“Years later I somehow convinced him to move to Dallas (his wife Linda didn’t forgive me for years). He helped to launch Traulsen’s sales base in Texas and the South.
“He never forgot his design roots and his respect for consultants. He invented the concept of Consultant Services.
“He became National Sales Manager and VP of Sales.
“Pepe worked for me and I worked for Pepe. Regardless of the ranking, we loved working with each other. He knew every nut and bolt of every Traulsen model ever built. He retired several years ago to spend more time with his wife, son Tony, and his daughter. He loved to travel, play tennis, and rebuild cars, including Corvettes.”
I couldn’t find a formal obituary or a photo of Pepe. But I knew him a good chunk of my career. He was simply a joy to know. I’m very sorry to hear of his passing. He was only 82. Which seems too young to me. You can see another recounting here: FES: Traulsen's Marius Pepe Griffo Remembrance
E&S Companies/Manufacturers, Consultants; People
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Things You May Have Missed...
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Curated and written by Robin Ashton, Principal at Ashton Foodservice Consulting. For information, e-mail Robin Ashton at rashton@theashtonreport.com.
The Ashton Report is published weekly and is a unit of RGA 2015 Holdings LLC.
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