Restaurant operators report positive same-store sales for fifth consecutive month; more optimistic about the overall economy
The National Restaurant Association's Restaurant Performance Index (RPI) — a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry — stood at 100.0 in October, nearly unchanged from Septembers level of 100.1. October's steady level was the result of softer sales and customer traffic being offset by a more optimistic outlook among restaurant operators.
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 99.5 in October — down 0.6 percent from September's level of 100.1. October marked the third time in the last four months that the Current Situation Index stood at less than 100, which signifies contraction in the current situation indicators.
Forty-five percent of restaurant operators reported a same-store sales gain between October 2010 and October 2011, down from 50 percent who reported a sales gain in September. In comparison, 35 percent of operators reported lower same-store sales in October, compared to 34 percent who reported similarly in September.
Thirty-seven percent of restaurant operators reported higher customer traffic levels between October 2010 and October 2011, while 39 percent of operators reported a traffic decline. In September, 43 percent of operators reported higher customer traffic, while 33 percent reported a traffic decline.
Forty-four percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, essentially unchanged from their reporting in the previous three months.
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 100.5 in October — up 0.4 percent from September and the highest level in four months. October also marked the second consecutive month that the Expectations Index stood above 100, which represents a positive outlook among restaurant operators for business conditions in the months ahead.
Thirty-five percent of restaurant operators expect to have higher sales in six months (compared to the same period in the previous year), down slightly from 37 percent who reported similarly last month. In comparison, 15 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, down from 19 percent last month.
Twenty-six percent of restaurant operators said they expect economic conditions to improve in six months, up from 22 percent who reported similarly last month.
Restaurant operators' outlook for capital spending rose for the third consecutive month. Forty-nine percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, the highest level in four months.
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