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Restaurant operators' optimism grows

NRA performance index rises in December on improved sales and outlooks

Strong gains in same-store sales and customer traffic helped to spark growing optimism among foodservice operators and fuel an increase in the National Restaurant Association’s monthly Restaurant Performance Index in December.

The RPI, a monthly composite that tracks the health of and outlook for the foodservice industry, rose to 101.0 in December, a 1.1-percent increase over its November level. December’s result marks the third time in the past four months that the index has stood above 100, which the NRA says reflects expansion in the index of key industry indicators.

“The RPI’s solid gain in December was driven by improvements in each of the eight current situation and forward-looking indicators,” said Hudson Riehle, the NRA’s senior vice president of the research and knowledge group. “Restaurant operators reported positive same-store sales and customer traffic results in December, and their outlook for sales growth and the economy continued to improve.”

“Overall, the RPI stood above 100 for the third time in the last four months, which suggests that the recovery is gaining a firm foothold,” Riehle said. “Driven by operators’ optimistic outlook for sales and economic conditions in the months ahead, the RPI’s Expectations Index rose to its highest level in nearly four years.”

Watch Riehle’s analysis of the December results:

The Restaurant Performance Index consists of two components: the Current Situation Index, which measures current trends in same-store sales, traffic, labor and capital expenditures; and the Expectations Index, which measures restaurant operators’ six-month outlook in the same areas.

The Current Situation Index rose to 99.7 in December, up 1.0 percent from November. However, while same-store sales and customer traffic increased, the NRA said softness in the labor and capital expenditure indicators more than offset that trend, keeping the Current Situation Index below 100.

Restaurant operators reported a net increase in same-store sales for the period between December 2009 and December 2010. Some 48 percent of operators reported same-store sales gains for the period, an increase over the 40 percent of operators who reported higher same-store sales in November. Meanwhile, 35 percent of operators reported a decline in same-store sales for the period, down from 44 percent who reported negative sales in November.

The Expectations Index increased to 102.4 in December, up 1.2 percent from November. This marks the Expectations Index highest level since March 2007.

Operators appeared to be more optimistic about sales growth in the coming months. Fifty-five percent said they anticipate having higher sales in six months, up from 42 percent last month. This marks the strongest level in more than four years, the NRA said. By comparison, only 8 percent of operators expect their sales volume to be lower in six months.

The RPI is based on responses to the NRA’s monthly tracking survey. The full report is available online at http://www.restaurant.org/pdfs/research/index/201012.pdf.

Contact Paul Frumkin at [email protected].
 

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