Net Lease News

B+E Weekly Newsletter

December 5 – December 11, 2023

MARKET

ECONOMY ADDS 199,000 JOBS IN NOVEMBER AND UNEMPLOYMENT RATE FALLS | Fortune

• U.S. employers added a solid 199,000 jobs in November while the unemployment rate fell, signaling a robust labor market that appears set to achieve the elusive “soft landing” of cooling pandemic-era inflation while avoiding a recession.
• The job market is gradually decelerating along the lines that Fed officials have wanted to see. The Fed has raised its key short-term rate from near zero to about 5.4%, a 22-year peak, leading to higher borrowing rates for consumers and businesses and lower inflation.
• When the Fed meets next week, it is considered sure to keep its benchmark rate unchanged for the third straight time in light of the easing inflation pressures. Most economists and Wall Street traders think the Fed’s next move will be to cut rates, though that might not happen until the second half of 2024.

RETAIL

MCDONALD’S AIMS TO OPEN NEARLY 9,000 RESTAURANTS | CNBC

• McDonald’s wants to open more than 8,800 locations and add 100 million members to its loyalty program by 2027.
• For 2024, McDonald’s is projecting net new restaurant growth of 4%. Nearly 2% of next year’s systemwide sales growth in constant currency will come from adding to its footprint.
• After 2024, the company plans to grow its restaurant count by 4% to 5% annually. Those new locations will contribute about 2.5% of systemwide sales growth in constant currency.
• By 2027, McDonald’s wants a global footprint of 50,000 locations. The chain had 41,198 restaurants worldwide as of Sept. 30. For comparison, Starbucks in November said it aims to reach 55,000 cafes worldwide by 2030, up from its current count of more than 38,000.

DOMINO’S UNVEILS FOUR-PART PLAN TO CAPTURE $7B IN SALES AND NEARLY 50,000 STORES | QSR Magazine

• The company is confident enough in the strategy that it completely retooled its five-year guidance and removed estimated ranges to hold itself more accountable. To start, annual global retail sales growth from 2024–2028 was bumped from 4–8 to 7 percent.
• The annual global net unit growth target increased from 5–7 percent to 1,100 net stores, or 5,500 across five years, close to Domino’s systemwide count in 2017. In the U.S. specifically, Domino’s has about 6,800 stores and expects that to reach roughly 7,700-plus by 2028 and 8,500-plus in the longer term.
• At the same time, Domino’s wants to put more money in the hands of franchisees. The chain forecasts 8 percent annual operating income growth in the next five years, which would be an additional $400 million.