A new round of financial reports has provided additional insight into the recovery of the restaurant industry. According to the companies that released the results, operators can expect more supply chain disruptions and continued upward pressure on food costs, as concepts promising a unique experience set record highs historical sales. Meanwhile, DoorDash and the other big third-party delivery brands are being challenged by a smaller player with a different business model.
Here are the details.
Sysco: Your pain is our gain
The retail giant’s domestic sales rose 7.7% from 2019 levels in the fourth quarter ended July 3, a management of the numbers linked in part to an increase in what it charges to restaurants then as food prices rise. Executives said they expect inflation to continue, especially for beef, pork, paper and packaging.
They also warned investors that unrest is likely to persist across the supply chain as suppliers are unable to grow quickly enough to meet growing demand for foodservice products. Labor shortages compound the problem, officials said.
They announced that Sysco will attempt to ensure a constant flow of drivers by starting its own truck driving school. Participants will be paid while they train and the company will cover all necessary licensing fees.
Management said it had not seen any erosion in demand for restaurant accounts due to the delta variant and the spike in COVID-19 infections it triggered.
The One Group: 59.5% jump in line-ups compared to 2019
Paced by a near-doubling in same-store sales for its high-end STK concept, this highly experiential food and beverage outlets operator recorded a two-year jump in mixed lineups for July of 59.5% . The 92.8% increase for the 23-unit STK follows an increase in the brand’s average unit sales to $ 288,000 per week in the second quarter. The largest brand of a group, Kona Grill, 24 stores, generated a 31.9% gain in same-store sales for July and a 23% increase for the second quarter.
The company has opened six new locations since the start of the year and management has told Wall Street that the US market could potentially support 200 Kona Grills and 200 STK.
Server: Swivel to payments
The little third party delivery provider has always been content to zigzag where bigger competitors like Uber Eats and DoorDash have zapped. He continues to do it in earnest by expanding his company include payment processing, leaders revealed the Server second quarter earnings call Monday.
This movement will be launched by the acquisition of three companies that process payments for merchants—ProMerchant, Cape Cod Merchant Services and Flow Payments, as well as an investment in Figure Technologies, which uses blockchain technology to process payments.
“YouLately we’ve been in this business now where we can’t be a mini–me of GateDash, ” Server CEO Carl Grimstad said on the call, according to a transcript by Alpha Finder. “In think beyond the last–delivery of miles, the addition of these payment companies is really the first big step in giving us the ability to offer a full range of payment services, not only to our installed base, but beyond that in others vertical.
Server generated revenues of $ 49.2 million in the quarter, down from $ 60.5 million the previous year. Average daily orders were roughly stable quarter over quarter, as were the number of active diners. After a series of profitable periods, the company recorded a net loss of $ 5.6 million in the second quarter, its second consecutive unprofitable quarter. Executives attributed this trend in part to higher labor costs.