In 2021 gross domestic product increased at its fastest rate since 1984. The National Restaurant Association and the IRC are lobbying Congress to provide additional funds to support the industry. Coffee shop traffic increases outpaced the restaurant industry in 2021. These stories and a whole lot more This Week in Foodservice.

The National Restaurant Association’s December Restaurant Performance Index was essentially unchanged from November. The Current Situation Index declined only 0.2 for a reading of 105.2. Any level greater than 100 signifies growth. The Expectations Index hit 104.4, an increase of 0.3. The study also showed a solid majority of operators reported December 2021 sales and customer traffic increased compared to the same month in 2020.

In addition, 58% of operators report making a capital expenditure for equipment, expansion and remodeling. This follows 8 consecutive months where this metric exceeded 60%.

As for investing in the future, 72% of operators plan to make a capital expenditure for equipment, expansion or remodeling. This marks the third consecutive month that more than 70% of operators planned capital expenditures in the next 6 months.

Economic News This Week

• Gross domestic product increased at an annual rate of 6.9% in the fourth quarter of 2021. As a result, 2021 was the Unites States’ fastest growth year since 1984. The fourth quarter’s results were 4.6% greater than the third quarter, too. The U.S. Bureau of Economic Analysis attributes the increase in GDP to accelerations in exports, inventory investments and consumer spending.
• December Restaurant Performance Index for the week ending January 22. This represents a decline of 30,000. The 4-week moving average totaled 247,000, an increase of 15,000.
• Durable goods orders declined 0.9% in December. The consensus forecast was for a drop of 0.6%. The fall in orders was essentially due to a 3.9% reduction in transportation equipment. Orders for cars and planes have fallen in three of the past four months Shipments of durable goods rose 0.8% in December and have risen in 7 of the last 8 months. Unfilled orders rose 0.5% in December and have risen for 11 straight months.
• Existing home sales declined 4.6% in December from November, per the National Association of Realtors. This breaks a string of three straight months of sales increases. Despite the December sales drop, existing-home sales increased 8.5% in 2021 on a year-over-year basis.
• New single-family home sales totaled 811,000 in December 2021 on a seasonally adjusted annual basis, per the U.S. Census Bureau. This is 11.9% more than the November 2021 rate and a decline of 14.0% from December 2020.
• Consumer sentiment improved moderately in December, per the University of Michigan Consumer Sentiment Index. The Index increased to 70.6 in December from 67.4 in November. The Current Economic Conditions Index inched up to 74.2 in December from 73.6 in November. The Consumer Expectations Index did show a meaningful increase rising to 68.3 in December from 63.5 in November.

Foodservice News This Week

• The restaurant industry continues to petition the U.S. Congress for additional support. Specifically, The National Restaurant Association has joined the Independent Restaurant Coalition and others in asking Congress to replenish the Restaurant Revitalization Fund. There seems to be near-total agreement that the industry continues to suffer as a result of the pandemic. The situation has been exacerbated by the emergence of the omicron variant of COVID-19. Some members of congress remain sympathetic to the industry’s difficulties, but any action may be a long way off.
• Consumers are spending more on less when it comes to restaurants, per data from The NPD Group. The average consumer made 12 fewer purchases last year, but their check averages were up 14%. On average, consumers visited 17 different chains in 2021, down 3 from 2019.
• Coffee sales continue to percolate in 2021 Visits to major coffee chains have returned to pre-pandemic levels. Foot traffic in coffee-based operations increased 8.4% in November and 7.5% in December. In contrast, overall dining traffic fell 6.4% in November and 1.8% in December.
• The drive to unionize Starbucks employees has reached 60 locations across 19 states. All of these locations are company-owned units. While the move to unionize certainly stands out and continues to make headlines, it’s equally important to note the Seattle-based coffee giant has more than 9,000 locations systemwide.
• Growth Chains: Fuzzy’s Taco Shop inked a development agreement for 50 stores all of which will have drive-thru windows. Huckleberry’s Breakfast & Lunch with 22 restaurants currently may add as many as 60 more in the next 3 years as the Cajun-style breakfast chain expands through California and the Midwest.
• Comparable Store Sales Reports: McDonald’s S. locations increased 7.5%

For comparable store sales of other chains, Please Click Here for the most recent Green Sheet.