Retail sales, including restaurants and bars, had marked improvement in March. Food prices increased, raising concerns regarding inflation, as restaurants reopen grocery store sales fall. Questions arise about Subway’s future. These stories and a whole lot more This Week in Foodservice.

Grocery stores were one of the few positive areas in the economy during the pandemic as restaurants were ordered closed and more meals were consumed at home. With restaurants reopening, though, things have turned around for operators. The Census Bureau reports a 13.4% sales increase for foodservice and drinking places, up 13.4% in March over February. In contrast, food and beverage store sales increased 0.7% and grocery store sales grew by 0.5%. Comparing March 2020 to March of this year, food and beverage store sales declined 11.8% and grocery store sales dipped 13.8%, while foodservice and drinking place sales were up 36%.

Overall, total retail sales increased 9.8% in March compared to February. Total retail sales are up 27.7% compared to March 2020. Total retail sales in February were revised from down 3.0% to down 2.7%. In the first 3 months of this year, Total retail sales are up 13.7% over the same period last year.

Economic News This Week

• Initial-jobless claims declined by 193,000 for a total of 576,000 for the week ending April 10. This is the lowest level for initial claims since the week of March 14, 2020, when 246,000 claims were filed. The 4-week moving average was 683,000, a drop of 47,250 from the previous week. This is the lowest level for the 4-week moving average since March 14, 2020, when it was 225,500. The declines in claims are encouraging and some would say long overdue.
• The Consumer Price Index increased 0.6% in March. The Index is up 2.6% in the last 12 months. The single largest factor in the CPI rise was a 9.1% jump in the cost of gasoline. Without food and energy included, the CPI was up 0.3% in March and up 1.6% in the last 12 months.
• Business activity experienced strong growth in New York State, per the Federal Reserve Bank of New York’s April report. This conclusion was based on the Fed’s monthly Empire State Manufacturing Survey. The General Business Conditions Index hit 26.3, an 8.9-point increase. Any reading greater than zero indicates increased activity. The New Orders Index posted a 17.8-point gain. The Shipments Index was up 3.9 points while the Unfilled Orders Index was up 17.6 points. Overall, this represents an extremely strong report.
• The Philadelphia Federal Reserve Bank of Philadelphia Manufacturing Business Outlook Survey indicated manufacturing conditions in the region continued to improve in April. The Business Activity Index hit 50.2, a 3.7-point increase. Any reading greater than zero indicates growth. The New Orders Index fell 2.2 points for a reading of 36.0. The Shipments Index hit 25.3, an increase of 3.3 points. The Unfilled Orders Index came in at 27.2, a 7.9-point increase. The Number of Employees Index hit 30.8, a 3.4-point increase.
• March privately owned housing starts increased 19.4% compared to February and 37.0% compared to March 2020. Single-family housing starts were up 15.3% compared to February. 
• March privately owned building permits were up 2.7% over February and 30.2% over March 2020. Single-family building permits were up 4.6% over February.
• The University of Michigan’s Index of Consumer Sentiment report climbed to its highest level in a year. The university attributes this rise to stimulus spending, low interest rates and the positive impact of vaccinations. The Index of Consumer Sentiment increased to 86.5 in the preliminary April survey, up from 84.9 in March. The Current Economic Conditions Index reading was 97.2 in April, up from 93.0 in March. The Index of Consumer Expectations was unchanged from March at 79.7.

Foodservice News This Week

• Consumer food prices increased 0.1% in March. The same applies to at-home prices and food-away-from-home prices. In the last 12 months, food prices have risen 3.5%, with food-at-home prices up 3.3% and food-away-from-home prices up 3.7%. Once again foodservice prices continue to outpace the cost of eating at home. It is quite likely the root cause for this is increasing labor costs at foodservice operations.
• Rumors swirl about Subway. The chain continues to close stores and its total unit count declined by more than 1,000 in the past year. At least one source predicts Subway will put itself up for sale.
• Taco Bell will open a digital-only restaurant in New York City’s Times Square. Customers must place orders digitally or use 1 of 10 kiosks at the store. Starbucks and Chipotle Mexican Grill will also open digital-only stores.
• TGI Fridays installs air purifying systems. The casual-dining chain said the move was an effort to protect both guests and employees. The purification system is said to reduce SARS-CoV-2, the virus that causes COVID-19, by greater than 99.9% in the air and 99.5% on surfaces.
• Smashburger enters the chicken sandwich battle. The burger chain calls its product the “Scorchin’ Hot Crispy Chicken Sandwich.” Could it be a bit spicy?
• Piper Sandler’s semiannual Generation Z Survey showed food is the number one wallet priority for teens. The research study also found 33% of teens are employed.
• Growth Chains: Sheetz plans to open a dozen stores in the Columbus, Ohio, area this year and the c-store chain intends to add 50 more locations starting in 2022. Nathan’s Famous partnered with Ghost Kitchen Brands to open 60 units in the U.S. and 40 in Canada.

For the latest comparable store sales reports, Please Click Here for the most recent Green Sheet.