Restaurant performance held steady in May, per the National Restaurant Association. Operators added 16,000 new employees in June. Fast-casual restaurant growth slows. McDonald’s focuses on breakfast. These stories and a whole lot more This Week in Foodservice.

The National Restaurant Association’s Restaurant Performance Index declined “modestly” in May, falling to 101.2 from 101.3 in April. Any reading greater than 100 indicates increasing activity.

The Current Situation Index was 100.6 in May, up .1 from April. In reality this index was a mixed bag in May with same-store sales trending upward but traffic trending downward. The other major component of the RPI, the Expectations Index declined by 0.4 from April. Some consumer surveys have similar results. Sort-term confidence is good but consumers are nervous about the future primarily due to threats of tariff increases.

Despite some uncertainty, 63 percent of operators reported investing in equipment, expansion and/or remodeling in the last 3 months. This was down from 67 percent in April but the NRA noted this was the third consecutive month where more than 60 percent of operators reported making capital expenditures.

And, 64 percent of operators plan to make a capital expenditure in the next 6 months, which is an increase from 59 percent who reported similarly last month.

Economic News This Week

Foodservice News This Week

  • Foodservice operators added 16,400 new jobs in May. This accounts for 8.0 percent of all the job growth in the private sector for the month.
  • Fast-casual restaurants represent the only foodservice sector to increase traffic in the past five years according to The NPD Group. But NPD also reports visits at fast-casual restaurants slowed in the last two quarters. Compared to growing 7 percent in the third quarter of 2017, fast-casual visits grew 4.0 percent in the quarters ending in December 2017 and March 2018. Fast-casual unit growth experienced a compound annual growth rate of 7.0 percent over the last 5 years with locations increasing from 19,231 in 2013 to 25,118 in 2017.
  • McDonald’s will emphasize breakfast. McDonald’s admitted the company took its eye off this daypart when the restaurant chain introduced day-long breakfast three years ago. In an attempt to recover lost market share, McD’s now offers breakfast catering at 195 units in Florida and has tested muffin tops and coffeecake in Baltimore.
  • Nearly 400 Corner Store locations in Texas will be rebranded as Circle K stores according to Alimentation Couche-Tard, which purchased the brand a year ago. This is part of worldwide effort to make Circle K a global brand.
  • Corporate Stirrings: Polar Star Capital Partners, a new private equity fund, announced the purchase of a controlling interest in Meridian Restaurants Unlimited. Meridian owns and operates 114 Burger King units and recently announced their intent to buy 10 Chili’s and 2 El Pollo Loco operations. Papa John’s International Inc. announced the sale of all their 34 locations in Beijing and Tianjin to the Asian private equity firm of Advantage Partners. CKE Restaurants, parent company of Carl’s Jr. and Hardee’s, announced they will expand their Franklin, Tenn., headquarters by 47,000 square feet and will hire office support, IT, finance, risk management and international operations personnel totaling 145 new jobs. Centerbridge Partners, a private equity company that acquired P.F. Chang’s in 2012, has announced the potential sale of the chain. The company said they are doing so because of P.F. Chang’s positive performance and the receipt of multiple unsolicited inquiries.
  • Growth Chains: The Coffee Bean & Tea Leaf plans to triple its number of stores in the U.S. in the next decade to 1,000. McDonald’s is going to expand its McCafe stores into Canada starting with two locations in Toronto. Taco Bell has signed master franchise agreements that will expand the number of locations in Brazil to 200 by 2017 and will add units in Japan to more than 200 in the next decade. Dunkin’ Donuts will open two more locations in Houston.
  • Comparable Store Sales Reports: Sonic Drive Ins (System down 0.2 percent, company owned up 0.2 percent and franchised down 0.2 percent.)

For details and same-store sales of other chains, please click here for the Green Sheet.