The National Restaurant Association’s February Restaurant Performance Index contrasts the past with the future. Several chains report increased sales. Many reports on the economy this week, both government and private, were very positive. Foodservice operators hired heavily in March. Saladworks plans to open 90 non-traditional locations. Technomic Inc. reported that the top 500 chains had total sales decline by 8.0% last year. These stories and a whole lot more This Week in Foodservice.

The National Restaurant Association reported that the Restaurant Performance Index rose 1 point in February for a reading of 100.1. This marks the first time since the start of the pandemic the index has exceeded 100, indicating growth.

At first pass, that news is good. It is a bit more complicated than that, though. The Current Situation Index totaled 95.4, a 0.6-point decline from January. Driving the February increase was a 2.6-point jump in the Expectations Index, which came in at 104.8. What operators seem to be saying is “Yeah, my traffic and sales were poor in February, but I believe business will get better soon.”

The research found 7 out of 10 operators believe economic conditions will be better in the next 6 months. This is the highest reading in the 19-year history of the Restaurant Performance Index.

It would be interesting to determine what role, if any, that the government’s stimulus money or the promise for it, played in the survey responses.

Economic News This Week

• Initial jobless claims increased by 61,000 to a total of 719,000 for the week ending March 27. The 4-week moving average also came in at 719,000, a decline of 10,500. This is one of the rare instances where the weekly number of claims and the 4-week moving average are identical. It is not of any particular significance. And while the number of claims was up significantly from the previous week, it is still less than any weekly total during the pandemic.
• S. employment grew by a hefty 517,000 jobs in March, per ADP’s National Employment Report. The gains were spread across firms of all sizes. And the leisure and hospitality sector made 169,000 new hires.
• S. employers added an astonishing 916,000 jobs in March, per the Bureau of Labor Statistics. The unemployment rate, which is determined by a separate survey, totaled 6.0% in March, down 0.2% from February. Many observers see the strong employment numbers as evidence of broad-based improvement in the economy.
• The Chicago Business Barometer climbed to 66.3 in March, the index’s highest point since July 2018. Through the first quarter, the index gained 4.4 points for a reading of 63.2, the strongest reading since the third quarter of 2018.
• Consumer confidence leapt to 109.7 in March, its highest level since the start of the pandemic, according to the Conference Board. The Present Situation Index shot up to 110.0 in March from 90.6 in February. The Expectations Index jumped to 109.6 in March from 90.9 in February. A Conference Board spokesperson said the economy is likely to strengthen in the months ahead but rising prices may temper growth.

Foodservice News This Week

• Some chains report substantial sales increases. Until these companies issue their quarterly financials, though, it will remain difficult to get a real handle on what is happening. Nevertheless, it is encouraging to hear operators talking about double-digit growth, sales exceeding pre-pandemic levels and more. Restaurant chains reporting improved sales volume include Fazoli’s, LongHorn, Olive Garden, Famous Dave’s and Granite City. This is only a handful of chains, of course, but the hope is more will report similar growth in the days ahead.
• Foodservice operators beefed up their payrolls by 175,800 employees in March, which is better than 1 out of 5 of the private sector employees hired last month. It appears as restaurants reopen they continue to call back staff and/or fill empty slots.
• Saladworks will work with Ghost Kitchen Brands to add 90 non-traditional locations. The partnership will bring 60 locations to the U.S. and 30 locations to Canada. Many of the new kitchens will be inside Walmart stores. Saladworks is part of the WOWorks Brands.
• Sales for the 500 restaurant chains declined by $27 Billion in 2020, per Technomic. This represents an 8.0% dip from 2019. Technomic also said operations with drive thru and/or delivery service achieved positive sales. As a group, the 500 largest chains closed just 2.0% of their locations. Chicken chains saw double-digit sales growth. Wendy’s breakfast program pushed the company to number five in total sales. And no full-service chain made it into the top 20.
• Just 19% of consumers say they would feel comfortable eating indoors at a restaurant a few weeks after their second dose of a COVID-19 vaccine, per a Harris Poll. Despite the Center for Disease Control saying vaccinated people should be safe two weeks after becoming fully vaccinated, this data makes it appear as if a high number of people will not enjoy indoor dining for a while.
• Dave & Buster’s plans major changes. Perhaps the biggest news is the chain’ will embracing sports betting. Then there is Wings Out, a virtual brand the chain will test in seven stores. Management has referred to a second virtual brand but did not disclose in what category it will operate. The company hopes these additions will drive more off-premises business.
• Pizza Hut launches a dedicated pickup window known as The Hut Lane. Customers can access The Hut Lane when they order via the Pizza Hut app, pizzahut.com and via telephone. Customers simply pull up to the dedicated window when they arrive, get their order and go.
• As it emerges from bankruptcy, Cici's makes some changes and more could be on the horizon. The biggest change is Cicis no longer focused on the buffet business. Before the pandemic struck, 10% of the company’s business was takeout. Now takeout accounts for 30% to 40% of revenues. The self-serve buffet is gone, too. Two employees now work the line. The company set a goal to reopen the 100 stores it lost during the pandemic.
• Growth Chains: Mooyah Burgers will open 20 restaurants in Phoenix in the next 7 to 10 years. Little Caesars will open at least 12 units in New York this year.
• Comparable Store Sales Reports: FAT Brands down 8.4% and Freshii, Inc. down 28.4%.

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