RPI Breaks 100 for First Time in 5 Months

Improving same-store sales and customer traffic levels propelled the National Restaurant Association’s Restaurant Performance Index to 100.3 – the first time in five months it has exceeded 100 thus indicating expansion in key industry indicators.

The RPI measures the health of the restaurant industry in relation to a steady-state level of 100. Index values of more than 100 indicate that key industry indicators are in a period of expansion, and index values less than 100 represent a period of contraction. The RPI consists of two components, the Current Situation Index and the Expectations Index.

The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 99.4 in September. While this was 0.5 percent increase from August, September marked the 37th consecutive month where this index scored less than 100.

Restaurant operators reported a net increase in same-store sales for the first time in six months in September, according to the NRA. Forty-four percent of restaurant operators reported a same-store sales gain between September 2009 and September 2010, up from 38 percent of operators who reported higher sales in August. Meanwhile, 38 percent of operators reported a same-store sales decline in September, down from 43 percent of operators who reported negative sales in August.

Restaurant operators also reported customer traffic levels increased slightly during September. Thirty-eight percent of restaurant operators reported an increase in customer traffic between September 2009 and September 2010, while 37 percent of operators reported a traffic decline, according to data released by the NRA.

The Expectations Index, which measures restaurant operators’ six-month outlook for four industry indicators (same-store sales, employees, capital expenditures and business conditions), stood at 101.1 in September – up 1.0 percent from August and its strongest level in five months, according to the NRA.

Restaurant operators are more optimistic about an improving business environment, with 43 percent of operators expecting to have higher sales in six months, up from 38 percent who reported similarly last month.  In comparison, 14 percent of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year, compared with 17 percent who reported similarly last month.

Looking at capital expenditures, 42 percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, down from 44 percent of operators who reported similarly in August. In contrast, 47 percent of operators plan to make a capital expenditure in the next six months, according to the NRA.

Related Articles
  • Mind the Gap
    As today’s generation is more sensory driven than previous ones, foods...