Restaurant traffic picked up significantly since the first of this year. Many food truck operators turned a disastrous 2020 into success stories. Suppliers struggle to meet demand as customers return to restaurants. These stories and a whole lot more This Week in Foodservice.

The National Restaurant Association’s April Restaurant Performance Index rose 1.2% but the organization warns comparisons are overstated given the weak performance in same month in 2020. The NRA describes April 2020 as the worst month in terms of industry performance during the pandemic. In any event, the RPI now stands at 106.3 and any reading greater than 100 indicates restaurant industry expansion.

The Current Situation Index, which is based on same store sales, customer traffic, labor and capital expenditures, hit 106.7, a 2.2-point increase. The Expectations Index totaled 105.9, a 0.2-point increase.

The report states that 61% of operators surveyed had made a capital expenditure for equipment, expansion or remodeling in the past 3 months. Even more exciting, operators intend to spend heavily in the months ahead with 74% of those surveyed planning to make a capital investment in the next 6 months. This is up from a very respectable 64% who reported similarly last month.

In light of the industry’s struggles from the past year, the NRA’s April survey results are certainly encouraging. But it is going to take a number of good months to show the industry has recovered from the pandemic. 

Economic News This Week

• Initial jobless claims declined by 38,000 for a total of 406,000 for the week ending May 22. The 4-week moving average declined by 46,000 for a total of 458,750. Most observers expect layoffs to continue to track lower.
• Gross domestic product increased at an annual rate of 6.4% in the first quarter of 2021, per the second estimate from the Bureau of Economic Analysis. This marks a 2.1% increase from the quarter of 2020.
• Real disposable personal income decreased 13.1% in April while real consumption expenditures decreased 0.15%, per the Bureau of Economic Analysis. The Bureau primarily attributes the decline in personal income to a “decrease in government social benefits.”
• Sales of single-family homes totaled 863,000 in April on a seasonally adjusted rate, per data from the U.S. Census Bureau and the Department of Housing and Urban Development. This is down 5.9% from March but up 48.3% from April 2020.
• April durable goods orders unexpectedly declined 1.3%. This followed a 1.3% increase of durable goods orders in March. The primary cause for the drop in durable goods orders was a shortage of parts, particularly computer chips.
• The Chicago PMI, also known as the Chicago Business Barometer, jumped to 75.2 in May. This is the highest reading the barometer has been in 47 years.
• Consumer confidence in May remained largely unchanged from mid-month, the University of Michigan reports. But a resurgent economy brought more immediate gains in demand than supply. This caused consumers to expect a surge in inflation and concern about the economy mounted. As a result, the University of Michigan’s Consumer Sentiment Index went from 88.3 in April to 82.9 in May. The Current Economic Conditions Index fell from 97.2 in April to 89.4 in May. The Index of Consumer Expectations dropped to 78.8 in May from 82.7 in April.

Foodservice News This Week

• Restaurant traffic came roaring back since the first of this year. The research firm of Zenreach reports foot traffic to food and beverage establishments was up 41% since the first of this year. And, with weather improving, COVID-19 vaccinations continuing to rise and limitations on dining out fading, some observers expect restaurant traffic to surge later this year. According to restaurant review site Yelp, restaurant reservations were up 46% in April.
• Food Trucks vs. The Pandemic. Some food trucks suffered as offices and other types of businesses these operators target told their employees to work from home. One food truck operator took a major hit when a dozen weddings he had booked canceled. Others saw festivals and concerts vanish. On the flip side, many of the truck operators successfully increased their business by expanding their menus. (Pizza seems to have been a good choice.) One food trucker saw business increase when he began accepting credit cards. While food trucks have some advantages in a pandemic (i.e., almost built in social distancing) it seems that many of the truck operators succeeded through creativity, hard work and determination.
• Nathan’s Famous plans to revive the Arthur Treacher’s brand. Treacher’s, which was developed in part by Wendy’s founder Dave Thomas, was moderately successful until the supply of cod fish fell because of the “cod war” that saw countries fighting about fishing rights. It would appear Nathan’s Famous will have its work cut out for it because it’s unclear how many people will remember who Arthur Treacher was (a British actor) and that there was a fish and chips shop named after him.
• Kellogg’s has partnered with the manufacturer of a salad-making robot to develop a similar product that works with breakfast cereal. The Kellogg’s Bowl Bot allows users to combine multiple kinds of cereal into one bowl. The company will test this at the University of Wisconsin and Florida State University.
• YUM! Brands inked a deal to acquire Dragon Tail, an Australian provider of artificial intelligence-based kitchen order management and delivery technology for $72.3 million. This is YUM! Brands’ third technology related acquisition this year.
• Another sign the industry is working its way back to normal is eatertainment concept Chuck E. Cheese plans to hire 5,000 people this summer. This includes front-of-the house roles as well as managers and kitchen staff.
• Growth Chains: Boston Pizza Restaurant & Sports Bar, with 437 restaurants in North America but just 27 locations in the U.S., the chain intends to expand in the Dakotas, Michigan and Ohio.
• Comparable Store Sales Reports: Cracker Barrel up 56.5%, FAT Brands up 8.7%. Fiesta Restaurant Group (Pollo Tropical up 4.3% and Taco Cabana down 4.3%) and Wingstop up 20.7%.

For details or same store sales of other chains, Please Click Here for the latest Green Sheet.