The National Restaurant Association’s Restaurant Performance Index  looked good in March. C-Store operators anticipate a profitable travel season. MOD Pizza is the fastest growing restaurant chain. In-N-Out Burger ranks number one customer loyalty. These stories and a whole lot more This Week in Foodservice.

The National Restaurant Association’s Restaurant Performance Index edged up 0.7 percent to a reading of 101.8 in March. (Any reading that exceeds 100 indicates increasing activity.)

The Current Situation Index hit 101.4, an increase of 1.0 percent. Factors driving this growth include increasing same-store sales and traffic counts — welcome news for operators and suppliers alike.

The other component of the RPI, the Expectations index, hit 102.2, an increase of 0.4 percent. More operators are bullish on future sales than in February. On the negative side, operators’ outlook for the general economy retreated from previous levels.

Operators willingness to spend money improved in the March survey with 61 percent stating they made a capital expenditure in the last 3 months for equipment, expansion and/or remodeling. This is an increase from 57 percent who reported they had done so in the February report. And, operators say they plan to keep investing, with 63 percent planning on making a capital expenditure in the next 6 months, up from 59 percent reporting similarly in February.

It appears that operators are experiencing reasonable performance so far this year.

Economic News This Week

• Initial-jobless claims declined by 24,000 to a level of 209,000 for the week ending April 24. This is the lowest number of initial claims since Dec. 6, 1969. The 4-week moving average fell by 2,250 to a level of 229,250.
• U.S. gross domestic product increased 2.3 percent in the first quarter of 2018 on annual basis according to the advance estimate from the Bureau of Economic Analysis. This marks a decrease from +2.9 percent in the last quarter of 2017 but is greater than the consensus forecast of +1.8 percent.
• Existing home sales rose 1.1 percent in March vs. February to an annualized seasonally adjusted rate of 5.6 million. Despite sales increasing in the past 2 months, total existing home sales are down 1.2 percent from the first quarter of last year. According to the National Association of Realtors the two major problems that remain are the low number of homes on the market and rising home prices.
• Sales of new single family homes hit a seasonally adjusted annual rate of 694,000 in March. This is a 4.0 percent increase compared to February and an 8.8 percent increase from March of 2017.
• New orders for manufactured durable goods increased 2.6 percent in March according to the U.S. Census Bureau’s advance report for the month. The Bureau noted that virtually the entire increase was driven by the transportation sector. The same was true for shipments and unfilled order transportation equipment pushing up both.
• The Conference Board’s Consumer Confidence Index increased in April rising to 128.7 from 127 in March. The Present Situation Index rose to 129.6 from 127 in March while the Expectations Index rose 108.1 from the March reading of 106.2. The Conference Board characterizes this as a moderate increase and looks for continuing growth in the economy.
• The University of Michigan Index of Consumer Sentiment fell in the final April reading to 98.8 from 101.4 in March. However, a University of Michigan spokesman pointed out 98.8 represents a very high reading for the index on a historical basis. Pulling the index down was the index of Current Economic Conditions which dropped from 121.2 in March to 114.9. But, the other component of the major index, the Index of Consumer Expectations, barely changed with a reading of 88.4 compared to 88.8 in March.

Foodservice News This Week

• More than three quarters of C-store operators expect sales to increase during the summer travel season according to a survey by NACS. Sandwiches and salads will drive the sales, according to the study.
• MOD Pizza is the fastest growing restaurant chain in the country, per Kalinowski Equity Research. The second fastest growing chain is Blaze Pizza followed in order by Shake Shack, First Watch and Coopers Hawk.
• In still another ranking article, market force information reports consumers rank In-N-Out Burger as the No.1 fast-food chain based on company loyalty. Chick-fil-A was the second ranked chain, followed by Culver’s, Raising Cane’s, Chipotle and Wawa.
• McDonald’s had a strong first quarter. Global comparable sales increased 5.5 percent while global comparable guest traffic increased 0.8 percent. U.S. comparable store sales increased 2.9 percent, beating many analysts’ forecasts. The company also reported strong performance in China and Italy.
• Starbucks changes its approach to drive-thru windows. The iconic brand was founded on the idea of being a place where customers could interact with the baristas, watch their drink being made and stay for a while. Times change and now 80 percent of all new Starbucks locations will have drive-up windows.
• Tim Hortons will spend $900 million (Canadian dollars) revamping the chain’s Canadian stores. The changes will focus on technology and on expanding the lunch menu. The company hopes to have most stores done by 2021.
• Growth Chains: World of Beer opened 6 locations in 2017 and plans to open 12 in 2018. Peco Pit Bar-B-Que Restaurants plans to open 20 units in the U.S. before going global. The Tommy Bahama chain with open its 18th Tommy Bahama Marlin Bar & Grill in the company’s Palm Springs, Calif., clothing store. Subway plans to open more than 1,000 locations outside the U.S., including in the United Kingdom, Germany and South Korea. The chain will also close 500 units in the U.S. Katsuya & Umami Burger intend to open more than 40 restaurants in Mexico, the first of 60 locations set to open globally in the future.
• Comparable Store Sales Reports: Baskin Robins down 1.0 percent, Bloomin’ Brands (all brands up 2.8 percent, Outback up 4.3 percent, Carrabba’s up 0.9 percent, Bonefish Grill down 0.1 percent and Flemming’s up 2.9 percent), Burger King up 3.8 percent, Cheesecake Factory up 2.1 percent, Chipotle Mexican Grill up 2.2 percent, Domino’s Pizza (U.S. system-wide up 8.3 percent, company owned up 6.4 percent and franchised up 8.4 percent), Dunkin’ Donuts down 0.5 percent, Luby’s (all concepts down 3.7 percent, Luby’s Cafeteria down 1.8 percent, Fuddrucker’s down 6.4 percent, Cheeseburger In Paradise down 13.9 percent and Combo Units down 5.4 percent), Popeye’s Louisiana Kitchen up 3.2 percent and Tim Hortons down 3.2 percent.

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