New concepts are on the menu for two operators, while two other operators get new owners. It’s spring so several new restaurant designs are in full bloom. And a new restaurant industry association emerges. These stories and more This Week in Foodservice.

The Consumer Price Index increased 0.1% in March, per the U.S. Bureau of Labor Statistics. It’s 0.3% less than February’s increase. Over the last 12 months, the all-items index increased 5.0%.

This is the smallest 12-month increase since May 2021. The index for shelter was by far the largest contributor to the monthly all items increase in March. It more than offset a decline in the energy index, which decreased 3.5% during the month. The food index was unchanged in March with the food at home index falling 0.3 percent.

Looking closer to home, the food index increased 8.5%. This includes increases of 8.4% for food at home prices and 8.8% for food away from home prices. The National Restaurant Association, though, points out that those numbers may be a little misleading. While the CPI shows menu prices outpacing grocery store prices for the first time in 18 months, this number is being distorted by the component that includes free school lunch programs, per the NRA. The association believes things will continue to play out this way through the fourth quarter of 2023.

The NRA does believe measuring menu price growth based on full-service (+8.0%) and limited-service (+7.9%) prices, it would be around 8%. The NRA goes into greater detail in exploring menu price increases and it is worth checking out that analysis for a more in-depth look at the way inflation, etc. continues to impact various operator segments.

Wetzel’s Pretzels will launch a new concept called Twisted by Wetzel’s. Images courtesy of Wetzel’s Pretzels

Foodservice News This Week

• Looking to unlock new development opportunities, Wetzel’s Pretzel’s has developed a new concept. Twisted by Wetzel’s promises to provide guests with a “bigger, bolder, more imaginative expression of Wetzel’s” to neighborhood locations starting in California, as restaurant development + design magazine reports.
• Pizza Guys plans to open a second virtual brand. Going to market as Pizza Piatta will operate from two of the chain’s locations in the Sacramento area. Pizza Piatta offers flatbread pizzas that guests can pick up or have delivered. Other menu items include stuffed cheesy breads, salads, desserts, and drinks from lunch until late night. All food items are made to order, per a release. Virtual brands are not unchartered territory for Pizza Guys. The company’s initial foray into virtual brands was through its Calzone life concept, which operates from 54 Pizza Guys locations.
• Craveworthy Brands has added a trio of Asian-themed concepts to its portfolio through its acquisition of Mongolian Concepts. Mongolian Concepts CEO Gregg Majewski is also CEO and founder of Craveworthy Brands, which formed earlier this year. Craveworthy’s other restaurants include Wing It On!, Krafted Burger + Tap, The Budlong Hot Chicken and The Lucky Cat Poke Company.
• Staying in the acquisition lane, Madison Square Garden Entertainment Corp. reached an agreement to sell the multibrand Tao Group Hospitality to Mohari Hospitality, Restaurant Business reported. The deal is expected to close in May. Tao Group includes about 80 restaurants and nightclubs in more than 20 markets across 4 continents.
• Pair Post Malone with his favorite restaurant chain and you get a bright pink restaurant exterior decorated with the musician’s tattoos. Turns out the Grammy Nominated musician’s favorite restaurant is Raising Cane’s and Malone is friends with the chain co-founder Todd Graves. They teamed up to design a unique Raising Cane’s location in Utah that celebrates the musician and his love of chicken fingers and more, as rd+d magazine reports.
• Freddy’s Frozen Custard & Steakburgers opened a corporate store a drive-thru and a mobile pickup window, per a Restaurant Dive report. Adding those features is key seeing as the chain reports close to 70% of its business comes from off-premises channels. The design also features an enhanced kitchen layout that includes new cooking equipment and items that store its signature frozen custard for off-premises consumption.
• Another week and another restaurant chain has union issues. Employees at a Portillo’s warehouse in a Chicago suburb won their union vote. Although none of the chain’s restaurants are unionized, the victory marks the first time workers at any one of Portillo’s nearly 80 facilities — restaurants or production venues — have successfully organized, Eater Chicago reports. Interestingly, the workers picked the Ironworkers Union to represent the 49 warehouse employees that worh there.
• Foodservice & Restaurant Supply was acquired by Innovative Foodservice Group, per published reports. Terms of the deal were not disclosed. South Carolina-based FR&S had revenues of $14.7 million in 2022, making it the 90th largest foodservice equipment and supplies dealer in the country, per FE&S 2023 Distribution Giants study.
• Last week saw the introduction of the Digital Restaurant Association, an advocacy and technology resource organization that will help operators navigate an increasingly digital world. The DRA will provide “educational resources, technology solutions,” per a release announcing its formation. It also intends to lead “local advocacy campaigns for restaurant owners and operators to achieve a more fair and sustainable restaurant technology ecosystem.” Leading the DRA is Joe Reinstein, a marketing, and digital media veteran and former Obama Administration White House Deputy Social Secretary. Tusk Strategies, founded by venture capitalist and political strategist Bradley Tusk, will help lead advocacy campaigns on behalf of digital restaurants around the country.
• The North American Association of Food Equipment Manufacturers has set a goal of providing 5 million meals for those in need. That’s the latest goal for the organization’s #NAFEMFightingHunger campaign, which is now in its fourth year. When members donate funds, food or volunteer time to their local Feeding America member food banks, NAFEM matches every dollar, up to its $250,000 program maximum. “While our match is just for members, we thank everyone in the industry helping to feed our neighbors in need through Feeding America and other hunger-relief programs,” says Rich Packer, CFSP, NAFEM president and president of American Metalcraft.

Economic News This Week

• U.S. retail and foodservices sales declined 1.0% in March 2023 compared to the previous month, according to data from the U.S. Census Bureau. Total sales for January 2023 through March 2023 period were up 5.4% (±0.4%) from the same period a year ago. Sales at eating and drinking places increased 0.1% compared to February. Indeed, it would appear that foodservice represents a bright spot when it comes to retail sales. For the first quarter of 2023, eating and drinking place sales were 4.6% greater than the volume registered in the fourth quarter of 2022, on a seasonally adjusted basis. That was more than three times stronger than the 1.3% increase in non-restaurant retail sales during the same period, the National Restaurant Association notes.
• Consumer sentiment improved ever so slightly in April. The University of Michigan’s Consumer Sentiment Index came in at 63.5 for the month, up 1.5 points from March. Consumers’ assessment of both the current and future economic conditions improved slightly, too. While consumers have noted the easing of inflation among durable goods and cars, they still expect high inflation to persist, at least in the short run.
• Initial jobless claims totaled 239,000 for the week-ending April 8, 2023, per the U.S. Department of Labor. This represents an increase of 11,000 claims from the previous week. The 4-week moving average was 240,000, an increase of 2,250 from the previous week. While this may be the highest number of claims in a year, the jobs market remains historically tight.
• The Producer Price Index for final demand declined 0.5% in March, the U.S. Bureau of Labor Statistics reported. And many economists view this as proof inflationary pressures are finally starting to ease after a year the Federal Reserve began raising interest rates. Final demand prices were unchanged in February and increased 0.4% in January. In March, two-thirds of the decline in the index for final demand can be attributed to a 1.0% decrease in prices for final demand goods. The index for final demand services moved down 0.3%. Prices for final demand less foods, energy, and trade services edged up 0.1% in March after rising 0.2%.