Plus, Wing Zone commits to installing a robotic frying system in its future restaurants

The National Restaurant Association’s Restaurant Performance Index declined 1.5% in April. The study’s Current Situation Index fell a nasty 2.2% and the Expectations Index dipped 0.8%. Despite the declines, the study still came in at 102.1%, which indicates the industry remains in expansion mode.

As for foodservice operators’ willingness to invest in their businesses, 60% said they had made capital expenditures in the last 3 months. This represents the lowest level for this metric in the past four months, per the NRA. Looking ahead, 70% of operators in the April survey said they intend to make a capital expenditure for equipment, expansion, or remodeling in the next 6 months. This is an increase from 63% last month.

Economic News This Week

• Real gross domestic product declined 1.5% for the first quarter of 2022, per the second estimate from the U.S. Bureau of Economic Analysis. The advance estimate projected a 1.4% decline. Real GDP in the fourth quarter of 2021 increased 6.9%.
• Initial-jobless claims fell 8,000 for a total of 210,000 for the week ending May 21, per the U.S. Department of Labor. The 4-week moving average hit 206,750, an increase of 7,250.
• The Producer price index for total final demand increased 0.5% in April, per the U.S. Bureau of Labor Statistics. The producer price index for final demand goods rose 1.3% for the month while the producer index for final demand services was unchanged from March. Over the past 12 months, total final demand has risen 11.0%.
• The consumer price index rose 0.3% in April, per the U.S. Bureau of Labor Statistics. This comes after a 1.2% March increase. In the last 12 months, the CPI is up 8.3%. In April the index for total food prices increased 0.9%. Food at home prices increased 1.0% and food away from home prices increased 6.0%. In the past 12 months, the index for food at home increased 10.8% and the index for food away from home increased 7.2%. The index of consumer expectations declined from 62.5% in April to 55.2% in May.
• Manufacturing activity in the New York region took a hit in May, per data from The Federal Reserve Bank of New York Empire State Manufacturing Survey. After a strong April, the index tumbled 36 points in May. Most current indicators including new orders, shipments and unfilled orders were down significantly. In contrast, the number of employees index grew by 6.7 points and the average employee work index edged up 1.9 points.
• Manufacturing in the Philadelphia region continued to expand in May, per The Federal Reserve Bank of Philadelphia’s Manufacturing Business Outlook Survey. The general activity index fell while the new orders index and the shipments index rose.
• Sales of new single family homes declined 16.6% in April from March and 26.9% from April, 2021, per data from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
• May consumer sentiment retreated to about the same low level as March, per the University of Michigan Index of Consumer Sentiment. The index totaled 58.4% in May, down 10.4% from April. The current economic conditions index hit 63.3 in May, down from 69.4 in April with negative views on buying conditions for homes and durable goods as well as concerns over inflation. But consumers were less pessimistic about their personal finances with less than a quarter expecting to be worse off a year from now and a majority expecting their finances to improve in the next five years.

Foodservice News This Week

• Wing Zone will equip its future restaurants with a robotic frying system, per various published reports. The first installations will occur in the 20 Wing Zone units planned for Southern California. Wing Zone has more than 100 stores in its development pipeline, too.
• FAT Brands will acquire the 85 franchised chain of stores known as Nestlé Toll House Café by Chip from Crest Foods. As part of the deal, FAT Brands will rebrand the locations as Great American Cookies, which is one of its portfolio brands.
• Fast-casual restaurant chain Schlotzsky’s opened its first drive-thru only unit. The Design 1000 features two drive-thrus, one on each side of the restaurant. The window on the driver's side is for traditional drive-thru ordering and the passenger side window is exclusively for delivery pickups. This prototype is a nod to the chain’s commitment to off-premises access, featuring no indoor seating and a walk-up ordering window in addition to the double drive-thru.
• A server in a New Hampshire restaurant received only patrons’ tips for compensation over a four-year period. A complaint to the Department of Labor resulted in the employee receiving back pay and damages in excess of $134,000. When word of the complaint and the subsequent award spread the Department of Labor received information that led to investigations that in turn lead to recovering more than $250,000 for low wage workers.
• Comparable Store Sales Reports: Arcos Dorados up 42.0%; Bad Daddy Hamburgers down 0.9%; BBQ Holdings Famous Dave’s company-owned units up 7.9%, Famous Dave’s franchised units up 8.6%, Granite City up 24.1%, Village Inn company-owned locations up 19.1%, Village Inn franchised units up 19.9%, Baker’s Square up 17.0%, Clark Crew up 5.0%, and Real Urban BBQ up 11.0%; Burger King up 10.3%; Cheesecake Factory up 20.7% and Domino’s Pizza (System down 3.6%, Company Owned down 10.5% & Franchised down 3.2%)

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