The NRA says foodservice showed a moderate gain in October. Casual dining chains saw comp-store sales decline in October. Big three hamburger chains are expected to have strong sales in October and November. McDonald’s all-day breakfast may be hurting family dining operators. These stories and a whole lot more This Week in Foodservice.

The National Restaurant Association reports its Restaurant Performance Index rose 0.7 percent to 102.1 in October. This represents the 32nd consecutive month the Index has exceeded 100, which indicates industry expansion.

The study’s Current Situation Index totaled 10.25, represent a solid increase of 1.2 percent. The fact that 61 percent of operators reported an increase in same-store sales compared to September helped drive the Current Situation Index higher. This was 10 points higher than the previous month. Forty-one percent of operators reported an increase in consumer traffic in October, which was one point better than the previous month.

The Expectations Index hit 101.6, a 0.2 percent increase. More operators expect higher sales in six months and more expect the overall economy to improve as well.

As for purchasing, 76 percent of operators made a capital expenditure for equipment, expansion or remodeling in the past 3 months. This is a sharp increase from the September reading of 66 percent. The only sour note was a slight decline in the percentage of planning a capital expenditure in the next 6 months. In September, 62 percent of the operators said they would be making a capital investment vs. 59 percent who answered similarly for October.

Overall, this was a pretty solid report.

Economic News This Week

• The economy, as measured by gross domestic product, grew at an annual rate of 2.1 percent in the third quarter, according to the Bureau of Economic Analysis’ second estimate. This represents a significant increase from the Bureau’s advance estimate of 1.5 percent.
• Initial jobless claims hit 260,000, a decline of 12,000, for the week ending November 21. The less volatile 4-week moving average was 270,000, the same as the previous week. Once again first time jobless claims remain at historically low levels.
• Personal income rose a respectable 0.4 percent in October but personal spending increased by just 0.1 percent. It appears that nervous consumers are electing to save their earnings rather than spend.
• New single-family home sales rose 10.7 percent in October vs. September sales. This is a seasonally adjusted annual rate of 495,000. October sales were up 4.9 percent over October 2014.
• New orders for manufactured durable goods increased 3 percent October after 2 straight months of decline, according to the Census Bureau’s Advance Report. Shipments fell by 1 percent while unfilled orders increased 0.3 percent. New orders for capital goods – those goods used to produce other goods – jumped 13.2 percent.
• The Chicago Production Manufacturing Index fell sharply in November declining by 7.5 points to 48.7. (Any number less than 50 indicates falling business activity.) This is the sixth time this year the Index has shown manufacturing in the Chicago area to be in contraction mode. The major reason for the decline was major drop off in the New Orders Index, which slid 15.3 points to 44.1. The Production Index also plunged but stayed just above the neutral 50 level. Order backlogs were essentially unchanged but remained in negative territory.
• For the second straight month, the Consumer Confidence Index fell in November to 90.4 – its lowest level in 14 months. In October the Index stood at 99.1. The Conference Board also reported that the Present Situation Index declined 108.1 from 114.6 in October. The Expectations Index fell to 78.6 in November from 88.7 in October. A spokesperson for the Conference Board stated the primary reason for the decline was consumers having a less favorable view of the job market.
• The University of Michigan Consumer Sentiment Survey hit 91.3 in November, down from the advance reading. Still, this represents an improvement over October’s final index number of 90.0.

Foodservice News This Week

• Casual dining chains saw same-store sales fall 0.7 percent In October. This is the first negative monthly sales result since July 2014. Knapp-Track, which is based on the actual sales of 50-plus casual chains, also reported guest counts were down 2.9 percent. Malcolm Knapp’s data is courtesy of Bank of America Merrill Lynch.
• October and November could be good months for the Big Three hamburger chains. Going back 20 or 30 years, more often than not it was a zero sum game for Burger King, McDonald’s and Wendy’s. If one was up another was down but now Mark Kalinkowski of Nomura predicts that all three may enjoy a same-store sales increases of 3 percent or more. Another analyst believes that the chains are stealing business from fast-casual operations “by shifting their pricing downwards.”
• McDonald’s all-day breakfast may be trimming sales off of family dining. With 14,000 locations even a small jump in breakfast sales at McDonald’s can have a significant impact throughout the industry. And the reverse can also be true. When McDonald’s was stumbling it may have helped the Denny’s and IHOPs.
• McDonald’s tries a simple solution to prevent drive-thru mistakes. McDonald’s – which admittedly has problems with its drive-thru service – will try a more personal program called “ask, ask, tell.” Big Mac feels one basic way to find errors in the order is to leave the top of the bag open rather than folding it over. About 70 percent of McDonald’s sales are from the drive-thru window.
• The E. coli outbreak may not impact sales at Chipotle too much, at least that’s what one investment analyst thinks. Even though Chipotle’s stock price initially fell by 12 percent, Bob Derrington of Telsey Advisory Group upgraded the shares to “outperform” with the expectation that same-store sales could rise slightly excluding the restaurants that were temporarily closed. However, he added if more illness is reported “all bets are off.”
• Add Sonic Drive-Ins to the list of restaurant chains offering delivery. Sonic will test an on-demand delivery app operated by Austin, Texas-based NeigborhoodFavor, Inc. The trial will run through Christmas.
• Corporate Stirrings: Deliveroo restaurant delivery service raised an additional $100 million in funding and has expanded to Europe, Asia, Australia and the Middle East.
• Growth Chains: Sliderz MG opened the first of seven proposed locations in the Miami area. Kono Pizza signed a 10-unit franchise deal for the Dallas/Ft. Worth area. Hakkasan Group will introduce its dim-sum tearoom in the U.S. with openings in Houston and Honolulu. Jimmy John’s plans to double its current restaurant count of 2,300 in the next 5 years and currently has 1,300 locations in the pipeline, 90 percent of which are with existing franchisees. The Eagle Food & Beer Hall will expand from their Cincinnati base with restaurants in Columbus and Indianapolis. Dunkin’ Donuts has announced the addition of14 new locations in St Louis and 2 in Kansas City.
• Comparable Store Sales Reports: Country Style Cooking down 10.7 percent, Cracker Barrel up 2.5 percent and ONE Hospitality Group up 0.35.

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