OPERATIONS

NRF exec to testify before Senate on data security

BY Dan Berthiaume

Washington, D.C. – The National Retail Federation (NRF) is scheduled to testify before a Senate committee the week of Feb. 3, as lawmakers begin to look into criminal attacks in which millions of consumers’ credit and debit card numbers were stolen.

NRF senior VP and general counsel Mallory Duncan will represent retailers before a subcommittee of the Senate Banking, Housing and Urban Affairs Committee Monday afternoon. Also testifying are officials from the Secret Service, the Federal Trade Commission, the American Bankers Association, the U.S. Public Interest Research Group and the Payment Card Industry Security Standards Council.

NRF recently asked Congress to give final approval to the Cyber Intelligence Sharing and Protection Act, House-passed legislation pending in the Senate that would make it easier for the commercial sector to share information about threats and ensure that cyber crimes are thoroughly investigated and prosecuted. NRF also wants Congress to replace the varying data breach notification laws currently on the books in 46 states and the District of Columbia with a single nationwide standard.

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MARKETING/SOCIAL MEDIA

Survey: More consumers eating take-out food

BY Dan Berthiaume

Jacksonville, Fla. – Shoppers are increasing eating out by actually eating in as they take advantage of ready-to-eat foods and meal solution offerings from grocery stores, quick-serve restaurants, food delivery and take away. A new study from AMG Strategic Advisors, “The Why? Behind the Buy,” shows that Millennials are most likely to use prepared food for meal solutions, but overall, 77% of total U.S. shoppers reported eating out in the past month.

In addition, 66% brought home prepared foods and 65% bought food at a restaurant drive through. Sixty-four percent ordered food from a restaurant for pick-up/carryout. Breakfast and snacking has seen the most growth in away from home eating.

The report also reveals that technology use for grocery shopping is catching up to other retail shopping. Among the top digital tactics are printing coupons online before shopping (30% of shoppers), loading coupons onto shopper cards from a website (26% of shoppers) and viewing a store’s digital circular (26% of shoppers). It also provides valuable data on the continued growth of the Millennial influence, as this group is projected to outspend the Boomer generation by 2020 with $65 billion in grocery spending shifting from Boomers to Millennials.

“We’re seeing the shopping landscape evolving at an accelerated pace,” said Marianne Quinlan-Sacksteder, director of insights at AMG Strategic Advisors. “As various factors converge, namely shifts in shopping and spending as generations mature and embrace different values and lifestyles intersecting with the exploding digital landscape, manufacturers and retailers need to ensure they truly understand the implications of these changes and how to capitalize on these trends.”

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FINANCE

Restaurant Performance Index slides in December

BY Dan Berthiaume

Washington, D.C. – As a result of softer same-store sales and customer traffic levels, the National Restaurant Association’s Restaurant Performance Index (RPI) registered a moderate decline in December 2013. The RPI, a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry, stood at 100.5 in December, down 0.6% from November and the first decline in three months.

Despite the decline, the RPI remained above 100 for the 10th consecutive month, which signifies expansion in the index of key industry indicators. The Index consists of two components – the Current Situation Index and the Expectations Index. The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 99.5 in December, down 1.7% from November and the lowest level in 10 months. Although restaurant operators reported net positive same-store sales in December, softness in the customer traffic and labor indicators outweighed the performance, which resulted in an overall Current Situation Index reading below 100.

Restaurant operators reported net positive same-store sales for the 10th consecutive month in December, but results were much softer than recent months. Forty-four percent of restaurant operators reported a same-store sales gain between December 2012 and December 2013, down from 57% who reported higher sales in November. In comparison, 41% of operators reported a decline in same-store sales in December, up from 29% in November.

Restaurant operators also reported softer customer traffic levels in December. Thirty percent of restaurant operators reported customer traffic growth between December 2012 and December 2013, down from 47% who reported a traffic gain in November. In comparison, 46% of operators reported a decline in customer traffic in December, up from 35% in November.

Despite the dampened sales and traffic levels, restaurant operators continued to report positive capital spending levels. Fifty-two percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, the eighth consecutive month in which a majority of operators reported making expenditures.

The Expectations Index, which measures restaurant operators’ six-month outlook for four industry indicators (same-store sales, employees, capital expenditures and business conditions), stood at 101.5 in December, up 0.4% from a level of 101.1 in November. In addition, December represented the 14th consecutive month in which the Expectations Index stood above 100, which indicates that restaurant operators remain generally optimistic about business conditions in the months ahead.

Restaurant operators are generally positive about sales expectations in the coming months. Thirty-eight percent of restaurant operators expect to have higher sales in six months (compared to the same period in the previous year), unchanged from the proportion who reported similarly last month. Meanwhile, 13% of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year, while 49% expect their sales to remain about the same.

In comparison, restaurant operators are somewhat less optimistic about the direction of the economy. Twenty-eight percent of restaurant operators said they expect economic conditions to improve in six months, while 16% expect the economy to worsen. The remaining 56% expect economic conditions to remain generally unchanged in the next six months.

Despite mixed economic outlook, a majority of restaurant operators are planning for capital expenditures in the coming months. Sixty-one percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, up from 55% who reported similarly the prior month.

"The December decline in the RPI was due to a dip in the current situation indicators, which in turn was partly caused by inclement weather in large parts of the country," said Hudson Riehle, senior VP of the Research and Knowledge Group for the Association. "Despite the softer December results, restaurant operators remain generally optimistic about business conditions in the months ahead."

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