Restaurant industry performance improved in May, per the National Restaurant Association. Consumer researchers find people really like Chick-fil-A and Texas Roadhouse. Standex International lost one of its warehouses due to fire. Family dining chain First Watch will move to a new corporate headquarters.

The National Restaurant Association Restaurant Performance Index has been on a bit of a rollercoaster ride lately. The Index was up March, dropped sharply in April and rebounded in May. The Index rose to 101.6, a 1.5 percent increase from April. This means industry was growth was virtually flat for the month of April.

In May, the Current Situation Index increased 1.8 percent to a final reading of 101.5. This modest increase to this portion of the index takes it from contraction mode into a period of expansion. In May all four of the Current Situation indicators – same store sales, customer traffic, labor and capital expenditures – showed growth.

The other component of the RPI, the Expectations Index, also was up 1.1 percent for a final reading of 101.7. Operators were bullish about their own sales in the future as well as the economy as a whole.

As far as investing in their own businesses, 61 percent of the operators report making a capital expenditure for equipment, expansion and/or remodeling in the last 3 months. This is an increase from 53 percent of operators reporting similarly last month. As for the future, 56 percent of operators plan to make a capital expenditure in the next 6 months. Last month 55 percent of operators surveyed were planning an investment.

While the NRA did not attempt to explain the gyrations of its RPI, at this point it might just be possible to assume April was some sort of statistical glitch, at least until the June survey is released.

Economic News This Week

Foodservice News This Week

  • Two studies – one result. Last week we reported the Harris Poll found Chick-fil-A and Texas Roadhouse were number one with consumers in their respective categories. This week the American Customer Satisfaction Index reported that Chick-fil-A was the number one quick-service restaurant and Texas Roadhouse was the number one full-service restaurant. It is highly unusual that two different studies done over different lists and asking different questions would arrive at the same conclusion for two different categories. It is a safe bet, though, the folks at Chick-fil-A and Texas Roadhouse will accept the findings.
  • Fire destroys a Standex warehouse. The company’s New Albany, Miss., refrigeration equipment warehouse and the inventory therein was destroyed by fire on June 26. The company’s New Albany production facility was not affected.
  • First Watch will move into a new corporate headquarters in Bradenton, Fla. The 39,000-square-foot building will have a test kitchen, indoor and outdoor dining and leisure spaces, private offices, conference rooms, classrooms and a workout center. As a result of this transition, the company says it can now have all corporate employees in one building. The chain also plans to add 85 employees.
  • Tatte Bakery Café will open a new facility in South Boston. The 30,000 square foot building will house production space, test kitchen and offices.
  • Corporate Stirrings: QSR Holdings Group LLC has purchased 45 existing Church’s Chicken Restaurants from Falcon Holdings LLC. QSR Holdings also signed a multiunit agreement for six Church’s Chicken units. QSR Holdings operates 58 Taco Bell and Pizza Hut Express restaurants. The amount paid for the 45 restaurants was not disclosed. Papa John’s has sold all of its restaurants in Beijing and Tianjin, China to Asia Gourmet Holdings Co. LTD. Asia Gourmet Holdings is a portfolio company of Advantage Partners, an Asian private equity firm.
  • Growth Chains: Taco Bell signed its first master franchise agreements. A master franchise agreement was signed with Sforza Holding Group in Brazil. The agreement covers opening 200 restaurants in the state of Sao Paulo by 2027. A master agreement was signed with Casual Brand Group in Spain for 4,200 restaurants in the next decade. Qdoba Mexican Eats will open a total of 20 locations in Alabama and the Atlanta area. BurgerFi will open 6 locations in Puerto Rico.

 

For comparable store sales reports for foodservice chains, click here for the most recent Green Sheet.