The National Restaurant Association’s Restaurant Performance Index declined 0.4 percent from May to 101.2 in June; the Current Situation also declined 0.4 percent for the month. Same-store sales rose but customer traffic levels were “somewhat softer.”

The other component of the RPI, the Expectations Index, also dropped 0.4 percent as operators were not bullish about sales growth and staffing levels as they were the prior month.

As for operators’ willingness to invest in their businesses, this too, was a bit softer than in the previous month. In June, 55 percent said they made a capital expenditure for equipment, expansion and/or remodeling in the past 3 months compared to 61 percent in May. Those operators planning a capital expenditure in the next 6 months fell slightly, from 56 percent in May to 54 percent in June.

Trying to predict future performance has been difficult as the Expectations Index is up one month and down the next. At least the index is above the 100 mark, indicating the industry is still in the expansion mode.

Economic News This Week

Foodservice News This Week

  • Foodservice hiring increased in July. After foodservice employment actually declined in June, operators added 15,400 employees in July. Thus, the industry accounted for more than 10 percent of the jobs added in the private sector last month.
  • The Cheesecake Factory will acquire Fox Restaurant Concepts. Included in the purchase is the balance of North Italia in which the Cheesecake Factory had invested $88 million in 2016 in anticipation of the purchase. The price of the acquisition is $353 million cash.
  • Perkins & Marie Callender’s is preparing to split up the two companies as part of a voluntary Chapter 11 bankruptcy procedure. The company is discussing the future with investors and potential buyers.
  • KFC will open a drive-thru only operation in Australia, the first in the world. The five-lane operation will make “service quicker, easier and more convenient” according to a KFC statement. The plan is for customers to order and pay for their meal with their KFC smart phone app or website before arriving at the site.
  • Growth Chains: FAT Brands announced it is partnering with Croft Ventures LLC, the parent company of Famous Franchisees LLC, to develop 25 Fatburger locations in Texas. Capriotti’s Sandwich Shops, with 100 locations and another 130 in development, signed 48 new franchisees in the first 6 months of this year and expects to sign more than that in the last 6 months. Mooyah Burgers, Fries & Shakes will open 2 locations in central Florida by the end of the year and plans 17 more in the next few years. Another Broken Egg, after years of little growth, has signed 9 new franchisees for a total of 31 new locations. The chain wants to have 300 units by 2025.
  • Comparable Store Sales Reports: Applebee’s down 0.5 percent, Baskin Robbins down 1.4 percent, Cheesecake Factory up 1.0 percent, Denny’s (domestic system up 3.8 percent, company owned up 4.4 percent and franchised up 3.7 percent), Habit Restaurants Inc. up 3.9 percent, IHOP up 2.0 percent, Texas Roadhouse (company owned up 4.7 percent and franchised up 4.3 percent), YUM! Brands (KFC U.S. up 2.0 percent, Pizza Hut U.S. up 2.0 percent and Taco Bell up 7.0 percent) and YUM China (KFC up 5.0 percent and Pizza Hut up 1.0 percent.)

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