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Restaurant Performance Improves, Tim Hortons Introduces New Design and Buffalo Wild Wings Wins When it Comes to Customer Loyalty

The Restaurant Performance Index improved in February. Tim Hortons introduces a new restaurant design in Canada. Buffalo Wild Wings customers are the most loyal according to a new survey. These stories and a whole lot more This Week In Foodservice.

 The National Restaurant Association’s Restaurant Performance Index (RPI) has been on a bit of a roller coaster ride lately. The index showed a notable 1.8 percent gain in December followed by a 2.0 percent decline in January. The index edged back up by 0.2 percent in February to 101.1.

The Current Situation component of the index rose 1.0 percent to 100.4. (Any reading greater than 100 indicates growth.) However, it was mixed results for the month with same-store sales rising but customer traffic declining.

The other component of the RPI, the Expectations Index, fell to 101.8 , a drop of 0.6 percent. Operators remained fairly positive about their future sales but less so about the overall economy.

Operators remain fairly bullish about spending money. As far as recent investing, 57 percent of those surveyed report capital spending for equipment, expansion or remodeling in the past 3 months. This is up from 52 percent who reported similarly last month.

Looking at future spending, 59 percent of operators plan on making capital expenditures for equipment, expansion and/or remodeling in the next 6 months. This is small decline from 61 percent last month.

Overall, it appears the industry remains reasonably positive.

Economic News This Week

  • Fourth quarter gross domestic product (GDP) increased at an annual rate of 2.9 percent according to the estimate released from the Bureau of Economic Analysis at the end of March. This is up from the previous estimate, which was 2.5 percent, and beat the prediction of 2.7 percent. However, it fell below the third quarter GDP increase of 3.2 percent.
  • Initial jobless claims fell 12,000 to 215,000 for the week ending March 24. This is the lowest initial jobless claims have been since Jan. 27, 1973. The 4-week moving average fell by 500 to 224,500.
  • Personal income rose 0.4 percent in February. This is the same rate of increase that personal income has had in three of the four proceeding months. The Bureau of Economic Analysis also reported Personal Spending increased 0.2 percent in February.
  • The Chicago Business Barometer fell 4.5 points to 57.4, which is the lowest the index has been in a year. Since any number greater than 50 indicates increased activity, expansion is continuing in the Chicago region but a slower pace. Production, new orders and order backlogs all fell in March but companies increased their hiring as the employment indicator rose to the second highest level in the past 12 months.
  • The Conference Board Consumer Confidence Index decreased in March, falling from 130 in February to 127.7. The Present Situation Index dropped from 161.2 to 159.9 while the Expectations Index declined from 109.2 to 106.2. A spokesperson for the Conference Board noted that February’s reading was an 18-year high for the index, and the readings suggest further strong growth in the months ahead.
  • The University of Michigan’s Consumer Index hit the highest level since 2004. The final March reading of 101.4 was up 1.7 from February. The Index of Current Economic Conditions rose from 114.9 in February to 121.2 ,which is an all-time high. The Index of Consumer Expectations slipped a bit from 90 in February to 88.8.

Foodservice News This Week

  • Tim Hortons to give guests a new experience with a revitalized design. Named the Welcome Image, the new look includes natural, lighter and more inviting materials. Inside, the Welcome Image offers upgraded, open-concept seating. The company plans to spend C$700 million in the next 4 years to redo the majority of its Canadian restaurants. The press release did not mention bringing the design to Tim Hortons in the U.S.
  • Study ranks casual-dining chains by most loyal consumers. An organization called Foursquare did a consumer study and found the casual-dining chain that generated the most loyalty was Buffalo Wild Wings, followed in order by Old Chicago Pizza, Denny’s, Applebee’s and IHOP. It was interesting to note that Hooter’s came in No. 8 and Twin Peeks was No. 13. It may be the research sample was heavily skewed toward young males.
  • HBO will kick off its new season of Silicon Valley with free pizza. HBO has partnered with Fooji, a brand delivery agency, to send pizzas to Silicon Valley fans in New York, Los Angeles and San Francisco. Fans can order pizza by tweeting #Sliceline with the pizza emjoi. #Sliceline is a fictional delivery app that is part of the show.
  • New mobile app generates money for using a restaurant’s restrooms. Called Luluapp, the service has signed up more than 100 restaurants in the NYC area that will allow the service to direct users to the closest facility. The charge runs from 99 cents to $5 depending on how fancy the restrooms are. The restaurant gets 65 percent of the fee and the operation can choose to offer some sort of incentive to the user such as free drink if they order a meal or another discount.
  • Corporate stirrings: Tropical Smoothie Cafe announced they have arranged up to $20 million in available financing for franchisee expansion. The money will also be available for existing franchisees to remodel. The U.K.-based Prezzo restaurant group will close 94 outlets, including operations under the Prezzo, Mexico, Cleaver and Chimichango names. As part of the negotiations, creditors will reduce the chain’s rents.
  • Growth chains: P.F. Changs will open 7 restaurants in the U.S. and 12 to 16 restaurants internationally this year. Friendly’s hopes to add 5 to 10 locations by 2019. Tropical Smoothie Cafe has a goal of reaching 1,000 units by 2020. Checkers and Rally’s are plan to add 20 restaurants in the Houston area.
  • Comparable store sales reports: Ark Restaurants up 2.2 percent, Baskin Robbins up 5.1 percent, Dunkin’ Donuts up 0.8 percent, One Group Hospitality up 6.0 percent and Sonic (system down 2.9 percent, company-owned down 3.7 percent and franchised down 2.8 percent.)

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