How did restaurants fare in July? Why is a shareholder taking Starbucks to court? Who is Henry, the fry robot? Answers to these questions and more This Week in Foodservice.

Restaurant industry performance declined again in July, per the National Restaurant Association’s Restaurant Performance Index.

The July RPI stood at 97.7%, which is 1.3% less than June. Any reading of less than 100 means the restaurant industry is in contraction mode.

Declining same-store traffic was a leading reason for the dip. The Expectations Index, which measures operators’ outlook for the future, declined 1.3% in July, too.

In addition, 51% of operators say they made a capital expenditure for equipment, expansion, or remodeling during the past three months. And 51% say they plan to do the same in the coming six months.

Foodservice News This Week

• Retail foodservice continues to grow its share of consumers’ stomachs. For example, 25% of consumers say they are replacing quick-service/fast-casual restaurant meals with retail purchases, per a post by the U.S. Chamber of Commerce. Citing data from FMI, the story adds that foodservice spending in supermarket delis increased 4.2% in 2023 for a total of $49.9 billion.
• They say everything is bigger in Texas and that most certainly applies when it comes to c-stores. The Lone Star State has more than 16,000 convenience stores, by far the most in the nation, per a C-Store Dive Story citing NACS data. California is second with more than 12,000 units. What makes Texas a hotbed for c-stores? A variety of factors, including a fast-growing population and desirable building locations.
• To help offset staffing challenges, an Ohio-based food hall has turned to Henry, the fry robot. “The fry station is one that is always difficult to staff because it is a hot, sweaty, greasy environment. Not a lot of people want to stand over fire all night long. So, this allows us to still deliver the product our guests want all night long, in a constant way, where we don’t have to worry about people not showing up,” the food hall’s general manager told News 5 in Cleveland.
• A class action lawsuit against Starbucks is percolating. The suit alleges the coffee company of misleading investors about its financial health and growth prospects by providing overly optimistic revenue projections while concealing significant challenges, per a Yahoo! Finance story. These misleading statements were made when the company unveiled its reinvention strategy. News of this suit comes hot on the heels of the Seattle-based chain making significant leadership changes, which includes the hiring of former Chipotle executive Brian Niccol to serve as Starbucks CEO.
• A California restaurant owner faces up to 20 years in prison after pleading guilty to fraudulently obtaining more than $4 million in COVID relief funds, per the CBS affiliate in Los Angeles. He sent in more than 20 fraudulent loan applications and has pleaded guilty to lying on applications for loans, filling out false tax forms that had never actually been filed with the IRS and inflating how many employees were on the payroll of his businesses, the story notes. As part of the fraud, prosecutors say Camino paid more than $100,000 in kickbacks to an accomplice.
• Social darts concept Flight Club has apparently hit the bullseye when it comes to menu and experience, so it is time to expand into other markets. The chain, which launched in 2015 in London, plans to open a 10,700-square-foot flagship location in New York City and it will open other units in Philadelphia and Washington, D.C., as Restaurant Hospitality reports.
• Every foodservice operator must find a way to balance the need to maintain a brand’s integrity while keeping the relationship with its customers fresh and relevant. And that challenge becomes even greater when it happens in a franchised environment. Franchise Times talked with chefs from five restaurant chains to explore how they innovate their menus.

Economic News

• Personal income and disposable personal income both increased 0.3% in July, per data from the U.S. Bureau of Economic Analysis. Personal consumption expenditures increased 0.5%.
• Real gross domestic product increased at an annual rate of 3.0% in the second quarter of 2024, per the second estimate from the U.S. Bureau of Economic Analysis. This is 0.2% more than the initial estimate for the second quarter and 1.6% more than the third estimate for the previous quarter. Factors driving the second quarter growth include increases in consumer spending, private inventory investment and business investment.
• Consumer sentiment improved in August, per the University of Michigan. Its Survey of Consumer Sentiment came in at 67.9% in August, which is 1.5% greater than July. While consumers’ perception of current economic conditions took a slight step back, the August Index of Consumer Expectations increased 3.3% compared to the previous month.
• Initial jobless claims declined by 2,000 for a total of 231,000 for the week-ending August 24, 2024, per the U.S. Department of Labor. The 4-week moving average was 231,500, a decrease of 4,750 from the previous week.