Restaurant unit count flat in 2008
Restaurant unit count flat in 2008—U.S. restaurant industry unit count was flat in 2008, compared to 2 percent growth in 2007, according to a census of U.S. commercial restaurant locations conducted each spring and fall by market research company the NPD Group. Major chain restaurant units (more than 500 units), were up 1 percent. Mid-size chains (100-499 units) showed no change. Minor chains (50-99 units) were down 2 percent, and smaller chains (3-49 units) and independent units declined by 1 percent each. The family-dining chains of all sizes showed unit declines, while quick-service restaurants continued to add units, though at a slow rate (1 percent). The finedining segment saw the sharpest decline in units, tallying an 8 percent drop.
ARG Enterprises files for bankruptcy—The owner of the Black Angus Steakhouse chain has filed for Chapter 11 bankruptcy protection amid the deepening recession. Los Altos, CA-based ARG Enterprises, which filed for bankruptcy late last week in U.S. Bankruptcy Court in Delaware, is $100 million to $500 million in debt. Its assets also fall within that range. An affidavit states the company operates nearly 70 restaurants in seven states, most of them near or on the West Coast, and employs 3,600 people. It’s not ARG’s first experience with bankruptcy. The company filed for Chapter 11 in 2004. Afterward, the company refurbished Black Angus, updated its menu and implemented a to-go service. Still, sales dropped to $181 million in 2008, from $244 million in 2006. “The debtors believe that these declines are primarily due to the recessionary economic environment,” Chief Restructuring Officer Lisa Poulin said in the affidavit. “Making matters worse, the debtors’ restaurants primarily are located in some of the areas hardest hit by the mortgage crises, causing consumers to cut back on discretionary spending such as dining out.”
Smithfield Innovation Group closes—Smithfield Foods has closed its unit dedicated to developing new products for the company’s customers, the company said. The Smithfield Innovation Group, created in 2003 when Smithfield bought the Global Culinary Solutions consultancy, was shut down in December and its Web site taken down. Five people reportedly were employed in the unit, including chef Michael Formichella. In a statement, Smithfield said that closing the Innovation Group “was one of many recent cost-reduction efforts.” It said that new product development has been moved to the independent operating company level and “new product development activity [is] continuing at its usual pace.”
Canada, Hong Kong reach beef deal—Canada has secured an agreement in principle with Hong Kong that will immediately expand that market to Canadian beef. The agreement also sets a timetable to open the Hong Kong market to all commercially significant Canadian beef exports, Agriculture Minister Gerry Ritz said. His announcement followed a weeklong trade mission to India and Hong Kong. The first stage of the process gives Canadian beef producers access to the Hong Kong market for rib cuts and most bone-in beef products—excluding vertebral column cuts—from cattle under 30 months of age. After meeting Hong Kong’s requirements during the first fourmonth phase-in period, Hong Kong will allow Canadian exports of rib cuts, boneless beef and offal from all Canadian cattle. If Hong Kong’s remaining requirements are met by the end of this calendar year, it will open its borders to all remaining Canadian beef exports from cattle under 30 months of age, including T-bones and porterhouse steaks.
USPB announces first quarter results—U.S. Premium Beef’s (USPB) financial results improved significantly in the first quarter of fiscal year 2009 as compared to the same period in the prior fiscal year. For the quarter, which ended Nov. 29, 2008, USPB recorded a net loss of $3.2 million, or $4.41 per set of linked units, compared to a net loss of $13.7 million, or $18.65 per set of linked units, for the same period in the prior fiscal year. Recent world financial instability and foreign currency deviations had a significant impact on the current quarter’s results and have resulted in decreased demand and value of certain industry products and inventories. Those events, along with continued constrained access to key export markets, pressured the company’s margins.
Cookoff wants“Sonoma-Style” recipes—In 2009, Sonoma, CA, will be known for inventive beef recipes. The 28th National Beef Cook-Off, funded by the Beef Checkoff Program, will come to Sonoma in late September, during the peak of the area’s beautiful harvest season, to host both a Home Cook competition and a Chef/Media Challenge. Home cooks nationwide, and local professional restaurant chefs working in the San Francisco Bay Area and Sacramento metropolitan area counties, are encouraged to showcase their “Sonoma-Style” by entering their original, newly developed beef recipes by March 31, 2009. The cook-off is a communication program with food media designed to promote beef consumption by reaching the food- and health-involved consumer with appealing beef recipes that deliver on taste, health and convenience benefits.