Operators have lowered expectations despite positive performance
While same-store sales and customer traffic levels were positive for the month of June, restaurant operators nevertheless have scaled back their expectations for the future, according to the National Restaurant Association’s Restaurant Performance Index.
The NRA’s RPI, a monthly composite that monitors the health of and outlook for the foodservice industry, held steady at 101.4 in June, unchanged from May. However, June marked the eighth consecutive month the RPI has registered above 100, signifying expansion in the index of key industry indicators.
“The latest Restaurant Performance Index reflects improvements in each of the four current situation indicators in June,” 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, while their capital spending activity advanced for the second consecutive month.”
However, Riehle added, “Although the overall current operating environment remains positive, operators have definitely tempered their expectations for the future. Each of the four expectations indicators softened in June, including restaurant operators’ least positive economic outlook in eight months. Still, market conditions are substantially better than two and three years ago.”
The NRA’s Restaurant Performance Index comprises 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 rose to 101.5 in June, a 0.7 percent increase over May and the strongest level in three months, the NRA said. It marks the eighth consecutive month the Current Situation Index has remained above 100.
Sixty-one percent of restaurant operators surveyed said same-store sales rose between June 2011 and June 2012, the same as in May. In comparison, 24 percent of operators said same-store sales fell in June, a decrease from the 28 percent who said they declined in May.
The Expectations Index, on the other hand, slipped to 101.3 in June, a 0.7 percent decrease from May and the third consecutive month the index has fallen. And while June was the 10th consecutive month the Expectations component remained above the 100 mark, it also represented the weakest level in seven months, the NRA said.
Fifty percent of restaurateurs said they expect to enjoy more positive sales in six month compared with the same period in the previous year. That is up slightly from the 48 percent who reported similarly last month. By the same token, 13 percent of operators anticipate that their sales volume will be lower in six months than it was in the year-ago period, the highest proportion in eight months.
In general, operators say they are not particularly optimistic about the direction of the overall economy. Twenty-eight percent of restaurateurs expect that economic conditions will improve in six months, a decrease from the 36 percent who felt similarly in May. In comparison, 21 percent said they expect economic conditions will deteriorate in the next six months, up from 19 percent last month.
The RPI is based on responses to the NRA’s monthly tracking survey.
Contact Paul Frumkin at firstname.lastname@example.org.