Restaurant industry remains in expansion mode despite softer same-store sales and customer traffic levels.
The National Restaurant Association's Restaurant Performance Index stood at 102.3 in May, down 0.4 percent from a level of 102.7 in April. Any reading in excess of 100 indicates a period of expansion among for the monthly composite index that tracks the health of and outlook for the U.S. restaurant industry.
The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 102.6 in May – down 0.2 percent from April. Key data points for the Current Situation Index include:
- Same-store sales: 67 percent of restaurant operators reported a same-store sales gain between May 2014 and May 2015, down from 71 percent who reported higher sales in April. In comparison, 19 percent of operators reported a same-store sales decline in May, up from 13 percent in April.
- Customer traffic: 52 percent of restaurant operators reported an increase in customer traffic between May 2014 and May 2015, down from 55 percent who reported higher traffic in April. Thirty-one percent of operators said their traffic declined in May, up from 25 percent in April.
- Capital spending: 60 percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last 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 102.0 in May – down 0.5 percent from a level of 102.5 in April. Key data points from the expectations index include:
- Sales outlook: 47 percent of restaurant operators expect to have higher sales in six months (compared to the same period in the previous year), down from 52 percent from last month.
- Overall economy: 30 percent of restaurant operators said they expect economic conditions to improve in six months, up slightly from 28 percent last month.
- Capital expenditure planning: 54 percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, down slightly from 59 percent who reported similarly last month.