One chain gets saucier, while the other updates its beverage menu. Plus, Panera updates its bread-making process. These stories and more, This Week in Foodservice.

U.S. real gross domestic product declined 0.3% in the first quarter of 2025, per the advance estimate provided by the U.S. Bureau of Economic Analysis. This represents a sharp decline from the fourth quarter of 2024, which saw GDP increase 2.4%. And the first quarter’s negative results snaps a streak of five consecutive quarters of positive growth.

As a result of this setback and the other economic turbulence that has remained a constant throughout the first quarter, economists now project GDP growth will slow significantly in 2025 and 2026, per a Morningstar report. One economist projects that overall GDP growth to come in at 0.8% in 2025.

Many economists attribute the decline, in large part, to businesses and consumers frontloading their purchases ahead of anticipated tariff-related price increases. As the National Restaurant Association points out in its analysis, imports increased 41.3% during the quarter, which subtracted 4.83 percentage points from GDP. In addition, personal consumption expenditures increased only 1.8% for the quarter.

What does this all mean for restaurants and foodservice operators? “That while consumers will continue to prioritize spending on food away from home, the amount and frequency may continue to moderate,” said Dr. Chad Moutray, the chief economist for the National Restaurant Association. “This is already playing out in unsettled same-store sales and overall traffic.”

Foodservice News

• KFC’s development plans are getting saucier, so to speak. Late last year, KFC introduced Saucy, a concept which focuses on chicken tenders, sauce and drinks. Sales at the initial Saucy location have been more than double KFC’s U.S. system average, per a Restaurant Dive story. The chain now plans a “phased expansion to at least 20 stores,” the story adds.
• Some drinks from CosMc’s will get a test drive at McDonald’s locations. During an earnings call last week, CEO Chris Kempczinski says the chain sees a long and profitable run way in the beverage business, per a QSR Magazine story. There are five CosMc’s locations in operation and among the lessons that McDonald’s has learned from this concept is that while there is some customization, the customer wants 80% of the drink to be recipe-ed already. This comes on the heels of McDonald’s reporting a 3.6% decline in same-store sales for the first quarter of 2025. This marks the chain’s worst decline since the 8.7% dip during the second quarter of 2020, as CNBC reports.
• Subway franchisees have closed 28% of the chain’s locations in less than a decade, per a Restaurant Business analysis. The 7,600 locations Subway closed is equal to the number of Taco Bell units in the U.S. One of Subway’s biggest challenges, the story notes, is the chain’s low unit volumes.
• Panera is making a significant shift to the way it produces its bread and other baked items. As part of an initiative that started more than a year ago, the fast-casual chain is shutting down its fresh dough manufacturing facilities, Nation’s Restaurant News reports. That dough was used to produce Panera’s bread, bagels, and pastries in its bakery-cafes. The chain will now use a par-baked approach where products arrive half-baked and are finished onsite. Panera is doing this for several reasons, including enhancing the guest experience and paving the way for unit growth, the story notes.
• San Dimas High School and Chalmette High School are the winners of the National Restaurant Association Education Foundation’s high school culinary and restaurant management competition. More than 400 of the nation’s best and brightest culinary and restaurant management students on 96 teams from 47 states and the District of Columbia competed for top billing and their share of $200,000 in scholarships.

Economic News

• The U.S. economy added 177,000 jobs in April, the U.S. Bureau of Labor Statistics reported. This was 8,000 positions less than March’s totals but more than Dow Jones' estimate, which projected adding 133,000 positions.
• Private sector employers added 62,000 jobs in April, per the ADP National Employment Report. April’s numbers represent a significant decline from March’s total of 147,000 jobs. Also, April posted the smallest gain since July 2024 and missed economists' projections by 58,000 jobs, per CNBC. The sector with the most job growth in April was leisure and hospitality, which added 26,000 positions. “Unease is the word of the day. Employers are trying to reconcile policy and consumer uncertainty with a run of mostly positive economic data,” said Dr. Nela Richardson, chief economist, ADP. “It can be difficult to make hiring decisions in such an environment.”
• Initial jobless claims increased 18,000 for a total of 241,000 during the week ending April 26, 2025, per the U.S. Department of Labor. The 4-week moving average was 226,000, an increase of 5,500 from the previous week. Continuing claims, which run a week behind and provide a broader view of layoff trends, rose to 1.92 million, up 83,000 and the highest level since November 13, 2021, per CNBC.