Hiring, especially in foodservice, really took off in February. Consumer acceptance of drive-thru windows has increased as a result of the pandemic. McDonald’s temporarily closes its Russian locations. These stories and more This Week in Foodservice.

Multiconcept operators are not a new idea and companies like Darden Restaurants, Bloomin’ Brands and YUM! Brands have obviously enjoyed a lot of success over the years. Of course, this approach does not work for everyone. Some companies decided after adding a new operation they are better off sticking to the one they know best. McDonald’s has made several acquisitions over the years only to later sell them. Boston Market is one example that comes to mind.

One organization that seems committed to operating a portfolio of multiple restaurant chains, though, is Inspire Brands. Formed just four years ago when Arby’s, which was backed by Roark Capital, merged with Buffalo Wild Wings. The company then brought Rusty Taco into the fold. Since then, Inspire Brands added Dunkin’ Brands, which includes Baskin Robins, Jimmy John’s and Sonic. Inspire Brands’ management has indicated the company will continue to acquire restaurant chains if the deal is right.

In addition to its plans to grow via acquisition, Inspire Brands continues to work with the prototype designs of its individual concepts, invest in equipment and more. This is the type of innovation that tends to come more easily when with scale. Plus, there is the diversity of revenue streams that makes the multiconcept approach so intriguing. Is this the wave of the future for chains? Only time will tell but the development of these multiconcept restaurant chain operators will remain interesting.

Economic News This Week

• New orders for manufactured goods increased 1.4% in January, per the U.S. Census Bureau’s full monthly report. In fact, orders have increased 20 of the last 21 months. Shipments, also up 20 of the last 21 months, increased 1.2% in January. Unfilled orders rose 0.9% and have increased for 12 consecutive months.
• Manufacturing activity grew in February, reports the Institute for Supply Management. The ISM’s Overall Index totaled 58.6, which is 1.0 more than the previous month. Any reading that exceeds 50 indicates expansion. The New Orders Index rose 0.8 points to 61.7. The Production Index totaled 58.7, a 0.7-point increase. The Order Backlog Index hit 65.0, an increase of 8.6 points. Of the 17 manufacturing industries surveyed in February 16 grew in the month.
• Service sector activity increased for the 21st consecutive month, per the ISM. Despite a 3.4-point decline, the index remains well above the break-even level at 56.5. The Business Activity/Production Index totaled 53.1, a 4.8-point dip. The New Orders Index fell to 56.1, a decline of 5.6 points. The Employment Index was down in negative territory at 48.5 due to a 3.8-point decline. The Order Backlog Index hit 64.2, an increase of 6.8 points. Of the 18 service industries surveyed on February 14 reported growth in the month.
• Total construction spending increased 1.3% in January compared to December, per the U.S. Census Bureau. This also represents an 8.2% increase compared to January 2021.
• Initial unemployment claims totaled 215, 000 for the week-ending February 26, per the U.S. Department of Labor. This represents a decline of 18,000 claims from the previous week. The 4-week moving average totaled 230,5000, a dip of 6,000 claims.
• U.S. nonfarm payrolls rose by 678,000 jobs in February, per data from the U.S. Bureau of Labor Statistics. Forecasts had called for the U.S. economy to add 415,000 new positions for the month, which seemed pretty optimistic.

Foodservice News This Week

• Food and drinking places increased employment 123,700 positions in February, per the U.S. Bureau of Labor Statistics. For comparison, last month, the number of new hires by all types of retailers was 37,000. And hospitals added 2,700 more employees. Another way of underlining the great hiring month the industry had was the fact that of 654,000 jobs added by private employers during the month, foodservice accounted for almost one out five of the new jobs.
• In response to the country’s invasion of Ukraine, McDonald’s has temporarily closed all 850 of its restaurants in Russia. McDonald's CEO Chris Kempczinski said the company will continue to pay its 62,000 Russian employees but added that “it’s impossible to predict when we might be able to reopen our restaurants in Russia.” The burger giant also temporarily closed all 100 locations in Ukraine. Those employees are getting paid, too.
• One result of the pandemic was to send more restaurant customers who do not normally use them to drive-thru windows. A lot of these folks found they like the safety and convenience drive thru operations offer so the number of customers regularly using this type of service has escalated sharply. For example, Dutch Bros coffee and beverage chain, which has drive-up window stores almost exclusively, report unit sales increased more than 50% last year compared to pre-pandemic times. But building drive-thru stores is not as easy as adding a window to the restaurant design. Using an existing restaurant layout with a drive-thru will probably require a larger piece of property. On the other hand, a drive thru only store, meaning a unit with little or no dining space, may allow a restaurant to reduce its real estate requirements. Naturally, as the demand for car-friendly real estate rose, so have the prices. The Wall Street Journal reports that on a national level the average price per square foot of drive thru property rose 7.0% in the last 2 years.
• After a decade of shrinking, shopping malls may be ready for a growth spurt. As internet buying cut into retailers’ traffic, many malls have sought to replace outgoing businesses with new ones that can provide unique experiences. And restaurants now top the list of new tenants mall managers seek. Dave & Buster’s represents one example of the type of entertainment-oriented restaurant malls continue to pursue, according to the Food Institute.
• Growth Chains: Buffalo Wild Wings plans to open 100 of its smaller format GO units this year. These locations feature limited seating and a design that promotes takeout and delivery. After adding 98 stores in 2021, Dutch Bros plans to open 125 more this year. Jet’s Pizza intends to open 30 restaurants this year and will expand into such states as Kansas, Nevada, New Mexico, Utah, and Washington. The Ruth’s Chris Steakhouse chain plans to open at least five restaurants this year.
• Comparable Store Sales Reports: Applebee’s up 34.8%, IHOP up 39.2%, Ruth’s Hospitality Group up 66.2%, Shake Shack up 20.8% and Starbucks up 18%.

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