Restaurants' rollercoaster relationship with social media continues. A sandwich chain bets on pizza in Las Vegas. Chipotle invests in the future of the foodservice industry, while Kitchen United receives an investment to propel its future growth. These stories and more This Week in Foodservice.

Restaurants have long had a star-crossed relationship with social media. If handled correctly, social media can provide restaurants with a nice short-term boom in terms of popularity and even sales. If handled incorrectly, a restaurant can go viral for all the wrong reasons.

Indeed, every new social media platform requires restaurants to take notice of their potential and devote considerable time and efforts to these platforms. Take, for example, TikTok, which in 6 short years has grown to more than 85 million users in the U.S. alone, per a published report.

It’s a platform that relies on time, consistency and creativity. And with restaurants fighting myriad macroeconomic issues, including supply chain challenges and ongoing labor woes, to name but two, time and creativity are often in short demand these days. Despite the even most well-thought-out efforts, the fact remains a restaurant going viral is never guaranteed.

Further, it’s never certain how long a platform’s popularity or a restaurant’s moment in the social media spotlight will last. Yet operators who ignore social media platforms do so at their own peril.

Indeed, restaurants’ relationship with social media seems like an endless loop of trial, error and whimsy.

Economic News

• Initial claims for unemployment totaled 251,000, an increase of 7,000 for the week ending July 16, per the U.S. Department of Labor. The 4-week moving average totaled 240,000, an increase of 4,500 claims.
• Manufacturing activity slowed in June, per data from the Institute for Supply Management. The June ISM Manufacturing Study came in at 53%, which is 3.1% less than the previous month. While this marks the 25th consecutive month where the manufacturing sector expanded there is still cause for concern. This is the lowest Manufacturing PMI reading since June 2020, when it registered 52.4%, per ISM.
• Manufacturing activity in the Philadelphia region declined. The Philadelphia manufacturing activity index fell further into negative territory declining 9 percentage points to minus 12.3, the Philadelphia Federal Reserve reported. The New Orders Index fell by 5.9 percentage points and the Order Backlog Index dropped by 3.5 percentage points.
• Existing home sales declined for the fifth consecutive month in June, per the National Association of Realtors. Sales dipped 5.4% compared to May and declined 2% from June of 2021. The median existing-home sales price rose 13.4% from June 2021 for a total of $416,000, which is a new record high.
• The Conference Board’s Leading Economic Index declined 0.8% in June. This comes on the heels of a 0.6% May decline. The Leading Economic Index declined 1.8% in the first 6 months of 2022 after increasing 3.3% in the last 6 months of 2021.

Foodservice News

• The Independent Restaurant Coalition continues to lobby the U.S. Congress for the economic support the industry absolutely needs. The IRC’s staff has been keeping in touch with members of congress in order to maintain their backing for legislative activity for funds for the restaurant industry.
• Denny’s has acquired Keke’s Breakfast Café from K2 Restaurants for $82.5 million. As part of the deal, Denny’s acquired certain assets and assumed certain liabilities of the franchise business, Keke’s Breakfast Café, along with eight restaurants owned and operated by the sellers. Keke's Breakfast Cafe offers handmade breakfast and lunch entrees with fresh fruits and vegetables. It will continue operating independently from Denny's with its own leadership, strategies, products, marketing, operations, and development initiatives, per a release announcing the deal.
• Capriotti’s Sandwich Shop will add a pizza-making robot to its Las Vegas flagship location, per published reports. If all goes well, Capriotti’s plans to add up to 100 more pizza-making robots within 5 years. Pizza represents a new menu category for the sandwich chain. Capriotti’s leaders feel offering pizza will increase the chain’s consumer appeal during the evening and late-night meal periods. At present, Capriotti’s sales lean heavily toward the lunch hour, the chain reports.
• Kitchen United raised $100 million in additional funding. Among the various investors participating this time around are a few with strong ties to the restaurant and foodservice industries, including Alimentation Couche-Tard/Circle K, The Kroger Co. and Restaurant Brands International. “We see many commercial opportunities in partnering with Kitchen United as it prepares for considerable scale. We believe this business stands apart from other industry players with its centralized locations, multi-format offerings, experienced management team, and mature technology stack — all of which align with Circle K's mission to make our customers' lives a little easier every day as we work together to shape the future of convenience,” said Kevin Lewis, chief marketing officer, Alimentation Couche-Tard in a release. Kitchen United has approximately 200 operational kitchens across 20 regions. The company will continue its focus on Los Angeles, New York City, Chicago, and Texas as key markets with continued expansion throughout other U.S. trade areas, per a company release.
• Chipotle’s Cultivate Next makes two investments. The $50 million venture fund will invest in Hyphen, a foodservice platform that designs automated makelines to help restaurant owners, operators and budding chefs make their kitchen operations more efficient. The fast-casual chain will also make an investment in Meati, which is developing protein products made from fungi.
• Higher food prices will remain an issue for a while, maybe as long as three years, per The Food Institute. Generally speaking, a food shortage can be corrected in a single crop year. But the current problem is so complex with the Russian invasion of Ukraine and political problems between nations that there do not appear to be any easy resolutions.

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