Inflation hits a 40-year high as the Restaurant Revitalization Fund could be headed toward a historic vote. Restaurant operators claim they may go belly up paying fees to third-party delivery services. Waffle House looks to add 35,000 employees. These stories and more This Week in Foodservice.

There’s still hope for the Restaurant Revitalization Fund after all.

A few weeks ago, it appeared highly unlikely the U.S. Congress would opt to replenish the RRF despite there being widespread support to aid restaurants. In fact, the RRF was not included in an appropriations bill passed last month. At that time many believed the program to support restaurants and bars was dead, at least for the immediate future.

Lawmakers’ biggest objection to replenishing the RRF was that government restrictions aimed at slowing the spread of COVID-19 had, for the most part, ended. But the fact remained that while 101,000 grants were given to restaurants while 177,000 applicants received nothing. And many operators had built up debts during the lockdown they couldn’t repay.

So, thanks to efforts by the National Restaurant Association, state restaurant associations, the Independent Restaurant Coalition, and a host of others, the RRF eventually picked up bipartisan support in the U.S. House of Representatives. Evidently, some lawmakers were persuaded by the argument that supporting the restaurant industry would generate more than enough economic activity to offset the cost of the bill. However, it was not a landslide victory. The vote was 223 to 203 with only a few Republicans voting for it.

While this may be an important first step for the industry, the struggle is far from over. The bill still has to receive approval from the U.S. Senate and there appears to be strong opposition from some senators even though the bill has a Democrat and a Republican sponsoring it. The bill will need the support of at least 10 Republicans to secure funding for restaurants while avoiding a filibuster.

It is quite likely that the fate of this legislation will have a major impact on the future of the restaurant business.

Economic News This Week

• The Consumer Price Index rose 8.5% in March compared to the same month last year, per data from U.S. Bureau of Labor Statistics. This is the fastest increase since December 1981, per published reports, and comes after a 7.9% increase in February. Not surprisingly, food and gas prices were among the biggest factors contributing to the increase, per the BLS. Even without food and energy, the CPI increased 6.5% in March, underscoring the widespread effect of inflation. Will this represent the peak of inflation? Some investors hope that’s the case.
• Initial jobless claims totaled 166,000, a decrease of 5,000 for the week ending April 2, per the U.S. Department of Labor. The 4-week moving average totaled 170,000, a decline of 8,000 claims. The number of claims is approaching its lowest level since November 1968 when the labor force than was about half of what it is now.
• Consumer credit increased 11.3% in February, per the U.S. Federal Reserve. Revolving credit, which is mostly credit card debt, was up 20.7%. Nonrevolving credit (auto loans, student loans, etc.) rose 8.4%.
• Private construction spending increased 0.8% in February from January, per the U.S. Census Bureau. Residential construction spending was up 1.3% in February over January.
• New orders for manufactured goods declined 0.5% in February, per the U.S. Census Bureau. This breaks a streak of nine consecutive monthly increases for this economic metric. Shipments increased 0.6% in February from January and now have been up 21 out of the last 22 months. Unfilled orders increased 0.4% in February and have grown for 13 consecutive months.

Foodservice News This Week

• Food prices increased 8.8% in March, per the U.S. Bureau of Labor Statistics. Taking a closer look at the data, food-at-home prices were up 10%, which was 3.1% greater than the increase for food-away-from-home prices. Menu-price inflation at full-service restaurants increased 8% year-over-year in March, surpassing the 7.2% increase at limited-service restaurants, per published reports. Overall, this marks a 40-year-high for menu price inflation.
• Independent restaurants’ relationships with third-party delivery companies remain complicated. At the start of the pandemic, third-party delivery companies waived or significantly reduced their fees and became a critical lifeline for independent operators. As COVID-related restrictions gradually eased over time, some delivery companies started to raise their fees. Operators considered dropping the companies but feared doing so will cost them business. Now with fees have reached as high as 30% of the total order in some cases, per a report in the Chicago Sun Times. As a result, operators often find themselves in a catch-22 situation: stay with the delivery companies and watch margins compress further or drop the delivery companies and risk going out of business. One Chicago restaurant owner reported paying $93,000 in third-party charges last year.
• Dave & Buster’s paid $835 million for Main Event, an eatertainment chain. Dave & Buster’s currently has 143 locations in the U.S. and Puerto Rico while Main Event has more than 50 units. Dave & Buster’s target audience is young adults while the Main Event aims at children and families. For this reason, the two companies will continue to operate as separate brands even once the merger is complete. Chris Morris, at present the CEO of the Main Event, will take over as president of the combined companies when the deal closes later this year.
• Waffle House plans to hire 500 Managers and 30,000 hourly employees. Waffle House is known for taking a creative approach to employee benefits such as store managers receiving two days off for every six days they work and stock purchase plans for hourly help.
• Growth Chains: Freddy’s Frozen Custard & Steakburger will open four Freddy’s in the Myrtle Beach Area. Crisp & Green, a Minnesota-based salad concept, is poised to open its first location in Denver, Colo. The fast-casual restaurant chain plans to add five more units in Colorado.

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