Who are the new KI Awards judges? Does casual dining offer better value than QSRs? How will the government shutdown impact the U.S. economy? Answers to these questions and more This Week in Foodservice.

The restaurant industry entered a period of contraction in September, per data from the National Restaurant Association.

The organization’s Restaurant Performance Index came in at 99.4 for the month, which is 0.4% less than August and the lowest level since March. Any reading of less than 100 indicates a period of contraction.

Although restaurant operators posted a modest net increase in same-store sales in September, they reported negative customer traffic for the 8th consecutive month. Restaurant operators’ outlook for business conditions remains mixed, with just 34% expecting higher sales in six months.

Despite these economic challenges, 52% of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months. That represented the fourth consecutive month where that data point has exceeded 50%.

Foodservice News

• Uncommon Equity LLC has acquired HopCat. The casual dining chain has 12 locations in Michigan and one in Lincoln, Neb. HopCat was an early player in the craft beer movement and has since evolved into a “regional neighborhood casual dining” chain. Founded in 2008, HopCat still offers a collection of local craft beers along with cocktails and more.
• Could Pizza Hut be the next restaurant chain sold? Multiconcept operator Yum! Brands is said to be exploring strategic options for its pizza brand, per a Restaurant Business story. Pizza Hut saw its same-store sales decline 6% during the third quarter. This story broke on the heels of the news that a trio of investors had inked a deal to buy Denny’s.
• The recipe to Chili’s successful run is not as complicated as one might think. The chain upgraded its ribs, changed its frozen margarita and invested in speed ovens to enhance speed of service, per a FSR Magazine story. The chain had a couple of false starts, but for parent company Brinker International’s first fiscal quarter of 2026, Chili’s posted a same-store sales increase of 21.4% and a traffic increase of 13.1%. This is all part of a three-year turnaround effort launched when Kevin Hochman became CEO in 2022.
• For some consumers, dining at a casual restaurant feels like a better proposition than visiting a quick-service restaurant, per a study from Bank of America. This particularly becomes the case after factoring in portion size, dining experience and perceptions of quality. That’s because due to labor costs and other economic headwinds, the gap between value and price has narrowed in the restaurant industry. For proof, consider the Chili’s item above. As a result of this dynamic, quick-service restaurants continue to tinker with their menus, including adding limited-time offers to drive traffic.
• Fast-growing coffee chain 7 Brew’s development plans just got a caffeine-like boost. Flynn Restaurant Group, one of the world’s largest restaurant franchising companies, inked a development deal to open 160 locations, per a Franchise Times story. This comes shortly after Flynn Group inked a deal to become a master franchisee for Pizza Hut and Wendy’s in Australia and New Zealand. Flynn Group operates 2,900 stores across 44 states.
• Staying in the coffee field, Starbucks is piloting a new store prototype that costs less to build, per a Nation’s Restaurant News story. The design will feature “optimized space utilization that still delivers a full coffee house experience,” the story adds. The chain says it converted a former pick-up only location in New York to this nimbler, budget-friendly design. The Seattle-based chain is on track to renovate 1,000 units by 2026. Starbucks reported flat sales on a global basis during the fourth quarter of its 2025 fiscal year, per a company release. North America and U.S. comparable store sales were flat, driven by a 1% increase in average ticket, offset by a 1% decline in comparable transactions.
• The National Restaurant Association Show welcomed two new judges to its prestigious Kitchen Innovations Awards program. And their names should be familiar to FE&S readers. They are Christine Guyott of Rippe Associates and Juan Martinez of Profitality-Labor Guru, as both have won the magazine’s Top Achiever-Consultant Award and are regular contributors to articles, blogs and more. They replace longtime judges Foster Frable and Jim Thorpe, who have stepped down from their roles. Foodservice equipment and supplies manufacturers who wish to submit their products for consideration for the 2026 KI Awards can do so here. The 2026 NRA Show will take place May 16-19 in Chicago.

Economic News

• The U.S. economy will make up some, but not all the economic losses incurred due to the federal government shutdown. The Congressional Budget Office (CBO) projects that a four-week shutdown would reduce fourth-quarter economic growth by 1% and an eight-week shutdown would reduce growth by 2%, per a PBS Newshour story. While the CBO expects the U.S. economy to claw much of that back during the first quarter of 2026, it projects the shutdown could still cost the U.S. economy somewhere between $7 billion and $14 billion.
• Are some parts of the U.S. economy already in a recession? Yes, according to Scott Bessent, U.S. Treasury Secretary, per a MSNBC story. Bessent made these comments while arguing in support of additional interest rate cuts from the U.S. Federal Reserve.
• What can we learn from third-quarter earnings reports? Turns out plenty. Many publicly traded companies have shared their quarterly earnings reports with more to come and one trend is becoming clear: higher-income households continue to spend while lower-income households are starting to pull back. Higher-income households have benefitted from stock market rallies and rising home values, as this CNBC story notes. In fact, higher-income households reported stronger economic confidence for the next year.
• Economic activity in the manufacturing sector contracted for the eighth consecutive month in October, per ISM Manufacturing PMI Report. The study came in at 48.7 for the month, which is a 0.4-percentage point less than September. For the second consecutive month, the New Orders Index contracted.