Restaurant industry performance shows moderate improvement in February. Restaurants account for one of seven U.S. jobs added in March. Inspire Brands is on a roll. These stories and a whole lot more This Week in Foodservice.

The National Restaurant Association’s Restaurant Performance Index rose 0.5 in February from January. The index now stands at 103.8. The Current Situation Index increased 1.5%. The Expectations Index fell 0.5 from January to a level of 102.9 in February.

Examining operators’ willingness invest in their businesses, RPI found that 71% of the operators surveyed made a capital expenditure for equipment, expansion or remodeling in the last 3 months. This is up from 62% in January.

As for what the future may hold, 71% of the survey respondents said they plan to make a capital expenditure for equipment, expansion or remodeling in the next 6 months, which is up 5% from January.

Overall, this study appears to say operators are fairly positive about business. 

Economic News This Week

• Initial jobless claims totaled 202,000, an increase of 14,000 for the week ending March 26, per the U.S. Department of Labor. The 4-week moving average totaled 208,500, a decrease of 3,500 to 208,500.
• Private employers added 455,000 jobs in March, per the ADP National Employment Report. A closer look at the data shows some anomalies. For example, the survey had small firms (49 or fewer employees) down by a hefty 96,000 jobs. For medium-sized companies (50 – 499), employment grew by only 18,000 jobs. According to ADP, larger companies fueled the employment growth by adding 552,000 workers. The Hospitality & Leisure sector added 170,000 new employees.
• Nonfarm payroll employment increased by 431,000 in March, per the U.S. Bureau of Labor Statistics. This came in at the low end of the majority of forecasts. The unemployment rate declined by 0.2% to a reading of 3.6%.
• Real gross domestic product increased by 2.3% for the fourth quarter of 2021, per the U.S. Bureau of Economic Analysis third estimate. This marks the largest increase in real quarterly GDP in three years with the exception of the third quarter of 2020.
• Real consumer spending has declined in three of the past four months. Real disposable income decreased 0.2% in February, per the U.S. Bureau of Economic Analysis. And real personal consumption expenditures decreased by 0.4% in February.
• Consumer confidence rebounded “slightly” in March. The Conference Board’s Consumer Confidence Index edged up to 107.2 in March after sinking to 105.7 In February. The Present Situation Index improved to 153.0 in March from 143.0 in February but the Expectations Index component fell to 76.6 from 80.8. Major factors wearing on consumer confidence are gasoline prices and the war in Ukraine, per the Conference Board.

Foodservice News This Week

• Foodservices and drinking places added 61,300 Employees to their payrolls in March, per data from the U.S. Bureau of Labor Statistics. With private employers hiring 426,000 new workers in the month, restaurants and bars accounted for approximately 1 out 7 of the people hired.
• Nearly 20% of the restaurant industry is awaiting support from the Restaurant Revitalization Fund, according to the National Restaurant Association. So should a vote on replenishing come up for a vote this week, the NRA sent a letter to Congress strongly supporting such legislation. How important is this additional RRF funding to the restaurant industry? Per an NRA survey, nearly 50% of restaurant operators that did not receive RRF grants feel it’s unlikely that they will stay in business beyond the pandemic without a grant. And 94% of restaurant operators that applied for an RRF grant, but did not receive funding, said a future grant would enable them to retain or hire back employees. Speaking to the impact of the first round of funding, the NRA survey shows that 96% of RRF recipients said the grant made it more likely that they would be able to stay in business; 92% said the grant helped them pay expenses or debt that had accumulated since the beginning of the pandemic.
• KFC introduced several restaurant designs to capitalize on consumers’ for off-premises consumption. The new store designs generally feature smaller footprints than typical KFC units and some have two drive-up lanes with one dedicated to mobile orders. Some designs have a separate entrance for takeout customers and others will have their own entrance for mobile orders.
• Inspire Brands chalked up major growth last year. All six multi-unit concepts contributed the company generating total corporate sales of more than $30 billion. This makes the company the second-largest restaurant company in the country. Inspire Brands revealed digital sales increased 35% last year and now account for 20% of corporate sales.
• Falcons Burger has purchased 30 Rally’s locations. This makes Falcons Burger the largest Checkers & Rally’s franchisee, per a release announcing the deal. The restaurants purchased are in Kentucky and Indiana and were previously owned by one of the chain’s initial franchisees, Joe Hertzman who is retiring. Falcons Burger has 57 Rally’s and is committed to opening more Rally’s locations.
• Growth Chains: Micro food hall concept Local Foods will open a location this spring in Davis, Calif. This will be Local Foods' second storefront outside of the five locations it has near its Bay Area headquarters. Local Foods opened a Roseville, Calif., location in March. KFC plans to add 110 locations in the U.S. this year, many of which will feature new restaurant designs as referenced above. Wendy’s, with a goal of expanding internationally, believes that someday the chain could have “hundreds” of stores in Mexico.
• Comparable Store Sales Reports: BBQ Holdings (Famous Dave’s company-owned units up 22.8%, Famous Dave’s franchised units up 26.5%, Granite City locations up 63.8%, Village Inn company-owned units up 54.5%, Village Inn franchised units up 51.7%, Bakers Square units up 50.4%, Clark Crew BBQ locations up 17.0% and Real Urban BBQ units up 8.9%.)

For comparable store sales of other chains, please click here for the latest Green Sheet.