Food halls continue to grow. The NPD Group says independent restaurants remain an important factor in foodservice. Famous Dave’s new store design drives sales. These stories and a whole lot more This Week in Foodservice.

There are probably a large number of Americans who are unaware of what a food hall is much less ever been in one. But while food halls represent a tiny part of the foodservice industry, they are a fascinating and rapidly expanding section of the business. Food halls generally allow foodservice operations to share dining space, kitchens and frequently some staff. They allow operators, particularly startups, to get rolling with a limited investment.

The research firm of Cushman & Wakefield started tracking food halls in 2015 and found there were 70 food halls open or under construction. At the end of 2017 there were 118 under construction and by the end of this year there will be 180. Cushman & Wakefield predict by the end of 2020 there will be 300 food halls in the U.S.

One target area for food halls has been shopping as the malls close food courts generally featuring national chains and replace them with food halls which frequently feature local foodservice operators. 

Economic News This Week

• Initial jobless claims increased by 11,000 to a final level of 234,000 for the week ending May 19. The 4-week moving average rose by 6,250 to a final level of 219,750. This is another piece of evidence that unemployment is well under control.
• April new home sales totaled 602,000 on an seasonally adjusted annual rate. This represents a 1.5 percent decline from March but an 11.6 percent increase from April last year.
• Existing home sales declined 2.5 percent in April to a seasonally adjusted annual rate of 5.46 million. Existing home sales are now running at 1.4 percent less than the first 4 months of 2017. While the number of homes on the market increased in April the available inventory continues to be low.
• The University of Michigan Index of Consumer Sentiment Retreated in the final May reading but by less than a percentage point as the index was at 98.0, down from 98.8 in April. Consumers showed some concern about their present situation with the Current Economic Conditions Index falling to 111.8 in May from 114.9 in April. On the other hand, the other component of the Index, the Index of Consumer Expectations rose slightly to 89.1 from 88.4.
• The Conference Board Consumer Confidence Index increased in May, rising to 128.0 from 125.6 in April. The Present Situation Index rose to 161.7 from 157.5 in April while the Expectations Index also increased, rising from 104.3 to 105.6 in May. The Board sees the May results as an indication that consumers will keep spending in the near future.

Foodservice News This Week

• The NPD Group reports the number of independent restaurants in the U.S. declined by 3.0 percent based on its Fall ReCount restaurant census. But NPD points out that the independents account for more than half the 647,000 restaurants in the country. Further, while the number of restaurant visits have declined, independents still account for 13 billion visits. And, independent restaurants have increased their purchases from major broadline distributors by 2.0 percent as well increasing the number of cases bought by 2.0 percent.
• Rehabbed Famous Dave’s unit generates more sales. Located in Coon Rapids, Minn., the extensively redesigned restaurant features lighter and brighter decor in addition to a revised menu. Since the upgrade, the location has experienced a 20 percent increase in sales.
• Wendy’s 2.0 redesign continues to evolve according to an article in Forbes. The design can offer variations of 55 seats, 40 seats or 30 seats. Wendy’s has been remodeling since 2011, is currently 44 percent complete and plans to be 70 percent done by 2020.
• McDonald’s has equipped 40 percent of its units in northeast Ohio with touch-screen ordering devices. The company estimates by the time all the northeast Ohio locations have been so equipped, the total investment will run $48 million.
• Chipotle Mexican Grill to relocate office personnel. Chipotle announced it will close its office in Denver and move to Newport Beach, Calif. In addition, the chain’s New York office will close. The company plans to expand its office in Columbus, Ohio, from 100 employees to approximately 250.
• Corporate Stirrings: Real Mex Restaurants Inc. looks to sell itself after being owned by its creditors since 2012. The company has hired Piper Jaffray as an advisor to handle the sale. Real Mex Restaurants owns Chevy’s Tex Mex, El Torito, Acapulco and Pink Taco brands. Long John Silver’s has acquired 76 restaurants owned by their franchisee SerUs. The Long John Silver’s locations being purchased are located Indiana, Kentucky and Michigan. Long John Silver’s corporate now owns over 200 of the brands restaurant. The press release did not state the financial terms nor the strategy behind the purchase.
• Growth Chains: Gloria Jean’s Coffees is expanding into Africa where it plans to open 15 coffee houses in the next 10 years. The Hy-Vee supermarket will open their first Wahlburger’s restaurant with 25 more to follow as part of their franchise partnership with the hamburger chain. Urban Bricks Pizza plans to open more than 100 locations in Arizona, Colorado and Illinois plus expand into Panama. Tropical Smoothie Café will open over 50 cafes in Illinois and Ohio in the next 5 years. Chick-fil-A will open 3 more locations in New York City. Burger King will open three restaurants in the Dayton, Ohio, area.
• Comparable Store Sales Reports: Ark Restaurants up 2.4 percent, BJ’s Restaurants up 4.2 percent, Bojangles down 0.6 percent, Cracker Barrel up 1.5 percent, Red Robin down 0.9 percent and Zoes Kitchen down 2.3 percent.

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