Can retailers' shrinking brick-and-mortar locations benefit restaurants? Which multiconcept operator could soon expand its co-branding efforts? What’s new with robots? These stories and more, This Week in Foodservice.

Not sure what to do for spring break? Consider a trip to Gatlinburg, Tenn., where you can spend the night in the Eggo House of Pancakes. Yes. You read that correctly.

Given that Gatlinburg is the self-described as the “pancake capital of the South,” it’s only fitting that one can book a stay in a place like this.

Syrup appears to drip from the roof. The exterior paint represents a stack of fabulous flapjacks. One bedroom features pancake-patterned wallpaper while the chimney resembles a stick of butter, per a Washington Post story.

Guests can get comfortably cozy in the “fluffy pancake beds and bean bag chairs.” They can also toast Eggo Mini Pancake s'mores at the fire pit overlooking the Smokey Mountains. And they are welcome to pour it on thick at the maple syrup fountain.

While most people know Eggo for its toaster waffles, the company wanted to give its “pancakes a moment to shine in a way that felt larger-than-life — literally,” per a company spokesperson.

Foodservice News

• Sweetgreen could be on the precipice of making robotics more common throughout its system. The chain reported tests of its Infinite Kitchen locations yielded improvements in throughput, order accuracy and labor turnover, per a Restaurant Dive story. The check average at those units was more than 10% greater than in surrounding markets. That said, building an Infinite Kitchen can lead to an incremental investment of $450,000 to $500,000 in development costs. But can result in a 7-point margin improvement at restaurants where it is installed.
• Retailers shrinking their brick-and-mortar footprints is turning into a golden opportunity for one fast-growing chain. Big box retailers continue to vacate some high-profile locations, leading real estate companies to redevelop those spaces. Enter Pinstripes, which has found dozens of highly desirable locations as a result of this phenomenon, per a FSR Magazine report. As a result of setting up shop in some pretty desirable locations, the chain now has an average unit volume of more than $8 million, with some exceeding $12 million in sales.
• Remodel your restaurants or get out of our system. That was the general message Subway sent to its franchisees who are taking too long to update their restaurants, per a Restaurant Business report. To help speed things along, Subway is turning to peer pressure by asking franchisees who have remodeled their locations to encourage their fellow owners to catch up, the story adds. The feeling is the dated stores hurt the entire system. This is not the first time Subway has sought to get slow-moving franchisees to get moving with remodels. Back in June, the company ordered franchisees to spend as much as $100,000 on remodeling their units, per a New York Post piece.
• Sibling concepts Applebee’s and IHOP could start opening co-branded locations here in the U.S., per a Nation’s Restaurant News report. Parent company Dine Brands feels there’s a lot to like about co-branding. Namely, the co-branded units feature the same square footage as a traditional standalone IHOP or Applebee’s restaurant, they are generating twice as much revenue. While the two concepts share the same back of the house, they feature two distinct entrances. Guests, though, can flow between the two spaces. Sharing the same back of the house helps maximize efficiency, too. This comes on the heels of Applebee’s opening only three new stores in 2023 and closing 36, per a story in FSR magazine.
• On April 4, Panera will roll out one of the largest menu updates in its history. The fast-casual chain will eliminate some menu items, enhance 12 existing items and introduce nine new ones. The gist of this effort is to refocus on “innovating and enhancing the core Panera items” that are most popular among guests, including soups, salads, sandwiches and mac and cheese. Focusing on these core items will help the chain “streamline and simplify operations for Panera’s cafe teams,” the company said.
• Chipotle plans to invest another $50 million in its Cultivate Next Fund, effectively doubling its commitment to this entity that makes early-stage investments into what the company describes as “strategically aligned companies.” One of its more notable investments to date is in Hyphen, a foodservice platform that strives to help restaurant owners, operators, and chefs “move their business forward by automating kitchen operations.” Chipotle is working with Hyphen to build a new digital makeline that uses intelligent automation to build bowls and salads while Chipotle employees operate the top makeline to make burritos, tacos, and quesadillas. In the coming months, Chipotle's Hyphen digital makeline will debut in a single restaurant location as part of the company's stage-gate process. Hyphen recently received an additional investment from Chipotle through Cultivate Next.
• Hard Rock International is partnering with Major Food Group to develop “dining experiences” at Hard Rock properties around the globe. A New York-based multiconcept operator, MFG will act in an advisory role to curate new food and beverage programming at existing integrated resort locations such as Seminole Hard Rock Hotel Hollywood, Seminole Hard Rock Hotel Tampa, and Hard Rock Hotel Atlantic City. In addition, MFG will support restaurant concept creation for Hard Rock properties in development like Hard Rock Hotel Athens and Hard Rock Hotel Barcelona.
• Restaurant industry performance took a slight dip in January, per the National Restaurant Association’s Restaurant Performance Index. The RPI came in at 98.7% in January, down 1.1 percentage points from the previous month. A majority of restaurant operators reported lower sales and traffic versus year-ago levels, which was largely attributed to challenging weather as well as difficult comparisons from a strong January 2023. Looking ahead, restaurant operators remained modestly optimistic about sales gains in the coming months. 

Economic News

• The U.S. economy remains on firm ground, per the latest from the U.S. Department of Commerce. The organization reports gross domestic product for the fourth quarter declined only 01.% from its original estimate of 3.3%. Consumer spending was revised to an increase 3.0%, which is 0.2% more than the initial estimate, per Reuters.
• Personal income increased 1.0% in January, per the U.S. Bureau of Economic Analysis. Disposable personal income increased 0.3%. Personal outlays increased 0.3%, too. Consumer spending increased 0.2%.
• Initial jobless claims increased by 13,000 for a total of 215,000 for the week-ending February 24, 2024, per the U.S. Department of Labor. The 4-week moving average was 212,500, a decrease of 3,000 from the previous week.
• Economic activity in the manufacturing sector contracted in February, per the Manufacturing ISM Report on Business. This marks the 16th consecutive month the index has contracted. The Manufacturing PMI came in at 47.8 in February, which is 1.3 percentage points less than in January.
• Economic activity in the services sector expanded in February, per the Services ISM Report on Business. This marks the 14th consecutive month of expansion for the services sector. The sector has grown in 44 of the last 45 months, with the lone contraction in December 2022.
• Consumer sentiment held steady in February, generally speaking, per the latest data from the University of Michigan’s Survey of Consumers. The index slipped just two index points below January to a level of 76.9. It also held the gains in sentiment seen over the past three months. Expected business conditions remained higher than last autumn, the study notes. Short-run expectations are 63% greater than and long-run expectations 46% more than the November 2023 readings. For all but one index component, readings this month were higher than all values between mid-2021 and the end of 2023.
• New orders for manufactured goods decreased 3.6% in January, per data from the U.S. Census Bureau. This follows a 0.3% December decrease. Shipments decreased 1.0% and unfilled orders increased 0.2%. Inventories, down two consecutive months, decreased 0.1%. New orders for manufactured nondurable goods decreased $3.3 billion or 1.1 percent to $293.4 billion. A decline in transportation orders drove much of this decline, per this Morning Star piece.