How has a historic water main break impacted Atlanta’s restaurants? Is BurgerFi for sale? Can an urban wing chain fly all the way to the ‘burbs? Answers to these questions and more This Week in Foodservice.

Amid challenging times for casual dining restaurants, an iconic brand prepares to make an improbable comeback.

When casual dining chain Steak and Ale opens a location in Burnsville, Minn., it will be the concept’s first new restaurant since 2008, per an FSR story. The 6,600-square-foot restaurant will be able to accommodate 220 guests and will include outdoor dining. The restaurant will also handle food and beverage operations for the hotel in which it resides. This will include room service.

Norman Brinker, a legend in the casual dining space, founded Steak and Ale in 1966 and by the 1980s it grew to more than 280 locations. Like other casual dining chains, Steak and Ale hit some tough times and industry insiders were stunned when all remaining locations were closed in 2008. In 2015, Paul and Gwen Mangiamnele bought Steak and Ale and began plotting the chain’s return to prominence. The chain is now part of Mangiamele’s company Legendary Restaurant Brands, which includes another iconic casual dining chain – 10-unit Bennigan’s.

Indeed, Steak and Ale’s return comes during a challenging period for casual dining chains.

In 2023, sales for casual dining restaurants increased by 4.7% among those concepts on Technomic’s Top 500 Chain Restaurant Report. (The data was cited in a Restaurant Business story.) The growth came mostly from higher menu prices, the story notes, as customer traffic declined 1.6%. And a few short weeks ago, Red Lobster, the ninth largest casual dining chain, per Technomic data, filed for bankruptcy due to a series of challenges.

How this plays out is anyone’s guess but Mangiamele is bullish on Steak and Ale’s future because it will capitalize on “the pent-up demand of legacy brands that already have awareness, with the ultimate goal of achieving global market share capture,” per the FSR story. He feels brands like Bennigan’s and Steak and Ale “develop very strong emotional connections, and emotional connections in the business world equals revenue, and revenue and the ability to create high-revenue restaurants.”

Restaurant News This Week

• The restaurant industry remained in contraction mode in April, per the National Restaurant Association’s Restaurant Performance Index, which came in at 98.8 for the month. Any reading of less than 100 indicates contraction. The association attributed the decline to restaurant operators being “somewhat less optimistic about business conditions in the coming months.” A majority of restaurant operators reported lower same-store sales and customer traffic in April. And less than 4 in 10 operators think their sales will be higher in six months, while only 1 in 10 expect the economy to improve.
• Multiple water main breaks in downtown Atlanta left restaurant operators flooded with challenges. Specifically, restaurants across several Atlanta neighborhoods were forced to close due to water outages and low water pressure, the Atlanta Journal-Constitution reported. Some had to contend with boil orders, too. One operator estimated the closures cost their business up to $30,000, per an Eater story. Perhaps the tide is turning for these restaurants as the city has developed a $5 million relief fund for businesses impacted by the water main breaks.
• BurgerFi may be for sale. Citing liquidity challenges, BurgerFi made the ominous announcement that it is “reviewing strategic alternatives.” (It also owns Anthony’s Coal Fired Pizza.) The news comes on the heels of BurgerFi reporting a challenging first quarter that saw same-store sales decline 13% and systemwide sales dip 17%, per Restaurant Dive.
• A wing chain takes flight toward the suburbs. Atomic Wings made its bones as a takeout-centric New York City-based chain. The concept’s typical unit has 10 seats. As part of a brand refresh, though, Atomic Wings has developed a 1,600 to 2,000-square-foot prototype that increases seating capacity to 40 from 10 in the chain’s original design, per a Nation’s Restaurant News story. In addition, Atomic Wings is targeting suburban areas for growth. Atomic Wings will also serve alcohol at some of these new suburban locations.
• Rusty Taco plans to grow its number of C-store locations to 10 thanks to a development deal with Good 2 Go, per a Restaurant Dive story. The Mexican-themed chain plans to add seven locations in seven Good 2 Go units this year. Rusty Taco already has units in Good 2 Go locations in Idaho and Utah.
• McDonald’s is pushing back on pricing perceptions. Quick-service restaurants continue to face pricing pressures in the form of higher food costs, labor and more. McDonald’s is no exception and reports of an $18 Big Mac meal have been circulating. In a letter on the chain’s corporate website, Joe Erlinger, president of McDonald’s USA, notes the average price of a Big Mac has grown to $5.29 from $4.39 in 2019 or an increase of 21%. The letter notes that many of the chain’s menu items “have risen less than the rate of inflation and remain well within the range of other quick-service restaurants.”

Economic News This Week

• The number of job openings totaled 8.1 million on the last business day of April, the U.S. Bureau of Labor Statistics reported. This is less than the 8.36 million openings at the end of March and it represents a three-month low, per CNN. Economists were expecting job openings to total 8.36 million, per the CNN story. As of April, there were an estimated 1.2 available jobs for every job seeker. That’s the lowest ratio since June 2021.
• New orders for manufactured goods in April increased 0.7%, per the U.S. Census Bureau. This was in line with economists’ estimates, per a MarketWatch story, and it follows a 0.7% decrease in March.
• Economic activity in the manufacturing sector contracted in May, per the Manufacturing ISM Report On Business. The May manufacturing PMI came in at 48.7%, which is 0.5% less than April. “Demand remains elusive as companies demonstrate an unwillingness to invest due to current monetary policy and other conditions,” an ISM spokesperson added.
• Personal income increased 0.3% and disposable income increased 0.2% in April, per the U.S. Bureau of Economic Analysis. Personal consumption expenditures increased 0.2%.
• Initial jobless claims increased 3,000 for a total of 219,000 for the week-ending May 25, 2024, per the U.S. Department of Labor. The 4-week moving average was 222,500, an increase of 2,500 from the previous week.
• Construction spending during April 2024 declined 0.1% compared to March, per an estimate from the U.S. Census Bureau. The April figure is 10.0 percent greater than April 2023. During the first four months of this year, construction spending is 10.9% more than the same period in 2023.
• Real gross domestic product increased less than originally thought in the first quarter of 2024, per the second estimate released by the Bureau of Economic Analysis. The BEA now says first quarter GDP increased 1.3%, which is 0.3% less than the initial estimate. The BEA attributes the adjustment to a downward revision in consumer spending. In the fourth quarter of 2023, real GDP increased 3.4%.