Casual dining chains to turn to automation to offset labor woes. Robotics pioneer targets beverages next. Operators remain solidly optimistic about the future. Two more restaurant chains get new owners.
The National Restaurant Association Reported Their Performance Index Had A “Moderate Decline” In May.
The National Restaurant Association’s Restaurant Performance Index hit 105.5 in May, down 0.8% from April.
The Current Situation Index, which monitors same-store sales, traffic, labor and capital expenditures, 105.7, a 1-point decline. These indicators remain elevated because of dampened comparisons from the early months of the pandemic.
The Expectations Index came in at 105.3, a decline of 0.6%. The association describes operators as “solidly optimistic” with plans for capital expenditures near a record high. Specifically, 63% of operators said they had made a capital expenditure for equipment, expansion or remodeling the last 3 months. This is the highest reading in almost three years.
Looking ahead, 69% of restaurant operators plan to make a capital expenditure for equipment, expansion, or remodeling in the next 6 months. This represents the fourth consecutive month with readings that exceed 60%.
Almost everyone would see this as a very positive report.
Economic News This Week
- Initial-jobless claims decreased by 51,000 for a total of 364,000 for the week ending June 26. The 4-week moving average totaled 392,000, a decrease of 6,000.
- Nonfarm payroll employment increased 850,000 in June. Of the jobs added, 662,000 were in the private sector and 188,000 were in the government sector, per the U.S. Bureau of Labor Statistics. Foodservice and drinking places added 194,300 jobs, which accounted for 29.3% of the hiring in the private sector. The unemployment rate inched up to 5.9% in June from 5.8% in May. One reason for the increase in unemployment Is more people are looking for jobs. People not seeking work are not considered unemployed.
- May construction spending declined 0.3% compared to April, per the U.S. Census Bureau. Compared to May 2021, though, spending increased 7.5%.
- New orders for manufactured goods increased 1.7% in May, per the U.S. Census Bureau. This came after a 0.1% decrease in April. Unfilled orders were up 0.8% in May.
Foodservice News This Week.
- To help offset their labor woes, casual dining chains such as Cracker Barrel and Dave & Busters are turning to automation. These are among the chains opting for contactless ordering and payment. Guests visiting any of Cracker Barrel’s 660 locations can place an order using the chain’s app or via a tableside tablet.
- Robots will continue to play a more prominent role in the restaurant industry, or at least that’s what the founder of Flippy the Robot sees as the future. In a partnership with foodservice equipment manufacturer Lancer Worldwide, Miso Robotics is developing an intelligence-backed beverage dispenser. This product seems poised to target the quick-service-restaurant segment.
- The National Restaurant Association predicts industry sales will rise in 2021 but the industry will not completely recover from the impact of the pandemic. The association predicts sales will rise 10.2% this year. Off-premises sales will remain a bright spot.
- The Small Business Administration has closed the Restaurant Revitalization Fund. The SBA will keep the platform open until July 14 to allow restaurants to check the status of their applications. As of June 30, 2021, the RRF program received more than 278,000 submitted eligible applications representing over $72.2 billion in requested funds, and approximately 101,000 applicants have been approved to restaurants, bars, and other restaurant-type businesses, per the SBA. The average grant amount is $283,000.
- Restaurant operator Ampex Brands’ plan to buy bakery chain Au Bon Pain serves as a sign of franchisees’ growing power in the U.S. restaurant industry. Ampex operates more than 400, KFC, Pizza Hut, Taco Bell, Long John Silver’s and 7-11 locations will now own an entire restaurant chain of its own. Ampex gains control of Au Bon Pain’s 171 locations.
- Fiesta Restaurant Group will sell fast-casual chain Taco Cabana to YTC Enterprises for $85 million in cash. Fiesta Group will use the proceeds from the sale to pay down approximately $74.6 million in Taco Cabana-related debt. The deal is expected to close in the third quarter of 2021.
- Growth Chains: Marco’s Pizza announced two new development agreements that will bring a total of 20 new stores to the Denver market. Papa John’s plans to open 250 restaurants in Germany over the next 7 years, working in partnership with franchisee PJ Western Group. The chain has seven Papa John’s in the German towns of Magdeburg and Leipzig and plans to open another six stores in Halle and Merseburg by the end of the summer.
- Stoner’s Pizza Joint opened its second location in Jacksonville, Fla. The chain now has 20 units in its Southeast region.
- Comparable Store Sales Reports: Jack in The Box. (System up 20.6%, Company Owned up 4.5% and franchised up 21.3%.)
For details same store sales of other chains, Please Click Here for the latest Green Sheet