Bullish foodservice operators reporting strong same-store sales and customer traffic gains helped spur growth in the National Restaurant Association’s Restaurant Performance Index for December, driving it to its highest level in nearly six years.
The NRA’s Restaurant Performance Index, a monthly composite that tracks the health of and outlook for the foodservice industry, stood at 102.2 in December, an increase of 1.6 percent over November results, the association said.
December also marked the third time over the past four months that the RPI registered above 100, signifying expansion in the index of key industry indicators. Results below 100 indicate contraction.
“Aided by favorable weather conditions in many parts of the country, a solid majority of restaurant operators reported higher same-store sales and customer traffic levels in December,” said Hudson Riehle, the NRA’s senior vice president of the Research and Knowledge Group. “In addition, restaurant operators are solidly optimistic about sales growth in the months ahead, and their outlook for the economy is at its strongest point in nearly a year.”
Riehle added that taken together with the positive November results, “the RPI’s impressive December performance bodes well for continued positive industry momentum in the year ahead. The ripple effect will likely be felt throughout the supply chain as well, with restaurant operators’ plans for capital spending rising to its highest level in more than four years.”
Watch Riehle provide an update on the December RPI; story continues below
The NRA’s 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 operators’ six-month outlook for same-store sales, employees, capital expenditures and business conditions.
The Current Situation Index jumped to 102.1 in December, registering a healthy increase of 1.9 percent over November levels. This marks the index’s strongest level in seven years, the NRA said, and the third time over the past four months that the Current Situation Index was above 100.
Sixty-nine percent of operators surveyed said same-store sales rose between December 2010 and December 2011; in comparison, only 18 percent reported that same-store sales fell during that period. The NRA said that qualifies as the strongest net positive sales performance since February 2004 when 70 percent said sales rose and 17 percent said they declined.
The Expectations Index was 102.3 in December, reflecting a hike of 1.3 percent over November and the highest level in a year. Meanwhile, December was the fourth consecutive month that the Expectations index was above 100.
The NRA pointed out that for the first time in a year a majority of restaurant operators project that sales will increase in the coming months. Fifty-one percent of those surveyed are anticipating that sales will be higher in six months, compared with the same period in the previous year when only 41 percent expected sales to rise.
Only 11 percent of operators said they expect the economy to perform worse in the next six months, down from16 percent who reported similarly in November.
The RPI is based on responses to the NRA’s monthly tracking survey.
Contact Paul Frumkin at paul.frumkin@penton.com.