The Great Recession 2.0
The National Restaurant Association releases a very bleak survey of current conditions in the Restaurant industry.
With rising expenses and declining profitability, restaurant operators say that economic conditions are worsening and are increasingly pessimistic that things will improve anytime soon, according to data from a survey released last Thursday by the National Restaurant Association. What's more, many restaurants say they cannot make payments on emergency loans they took to get themselves through the pandemic. Take it all together, and the survey paints a picture of pessimism among restaurant operators that rivals what was seen during the Great Recession. "Consumers are watching prices rise faster in grocery stores than they are in restaurants and see an increased value in spending their food dollars in restaurants," Michelle Korsmo, CEO of the NRA. "However, the moderate menu price increases aren't balancing the surging input costs, forcing operators to cut hours, change their menus, postpone expansions and reduce third-party delivery." (A headwind for DASH)
The report surveyed 4,200 operators between July 14 and Aug. 5. In the survey, 46% of operators say business conditions were worse than they were three months ago. By comparison, just 16% said that conditions have improved. One option that appears to be gaining traction is surcharging: 16% of operators told the association that their restaurant is adding fees or surcharges to checks to combat rising costs, which is divided evenly between full-service operators (17%) and limited service (16%) - 75% believe the surcharge will last more than a year. 85% of operators say their restaurant is less profitable than before the pandemic, and nearly two-thirds of restaurants took on new debt to get through it. The Paycheck Protection Program (PPP) was the most common, with 59% of operators have taken out such a loan. Nearly half, 48%, took on Economic Injury Disaster Loans (EIDL), and 31% took a private loan from a bank. Of those with EIDL debt, 40% owe more than $200,000. And many haven't started repaying yet. Only one-third have made a payment on their debt. And less than a quarter of those with EIDL loans say they will be able to make scheduled payments once a deferral period is finished. In other words: 37% of restaurants say they have EIDL loans and will be unable to make payments on those loans once they are scheduled to begin. The survey also suggested that most restaurants remain understaffed—65% of operators say they don't have enough workers, and 84% say they will likely hire additional employees over the next six months. Nineteen percent of full-service operators and 21% of limited-service operators say they are 20% or more understaffed.
DOORDASH
Last week DASH added GO to the list and now is losing WMT looked at it another way; WMT does not need DASH.
"DoorDash is ending its years-long partnership with Walmart to deliver groceries and other products from stores to customers, according to several people close to the matter. One source close to the situation who requested anonymity because the matter is confidential said DoorDash decided to stop working with the Bentonville, Arkansas-based retail giant "as it was no longer mutually beneficial" and to "focus on its long-term customer relationships." Their identity is known to Insider. The delivery company sent Walmart a letter to terminate their partnership earlier this month and gave a 30-day notice, making the termination effective in September, according to the source. DoorDash declined to comment on this story. A Walmart spokesperson said the companies "have agreed to part ways" when asked about the termination of the partnership. "We'd like to thank DoorDash for their partnership and support of our customers the past several years," the spokesperson said. The move ends a partnership that launched in April 2018 between the two companies. The partnership began as a test pilot to deliver groceries for Walmart customers in the Atlanta metro area and has since expanded to states across the country. Walmart has been working to build out its delivery arm on top of using third-party delivery service providers like DoorDash. Walmart confirmed to Insider on Thursday that it is acquiring Delivery Drivers Inc., the company behind Walmart's Spark platform on which gig workers shop and deliver orders for Walmart customers. A Walmart spokesperson said that the Spark platform has grown to "become our largest delivery service provider," as it accounts for 75% of Walmart's deliveries and serves 84% of US households." Business Insider
WEN E. Coli Issue
The Centers for Disease Control and Prevention said Wendy's Company restaurants had been associated with an E. coli outbreak reported in four states. The agency looks at the incidents involving 37 infected and ten hospitalized. WEN is removing the romaine lettuce used in sandwiches from restaurants in that multi-state region after noting that most sick people reported eating sandwiches with romaine lettuce. The CDC said it is not advising that people avoid eating at Wendy's restaurants or that people stop eating romaine lettuce. However, the agency is probing the outbreak's source and if any other action is warranted.
