While same-store sales and customer traffic presented a mixed bag in April, a general sense of optimism among operators helped to spur growth in the National Restaurant Association’s Restaurant Performance Index, pushing the study to a 10-month high.
The NRA’s Restaurant Performance Index, a monthly composite that tracks the health of and outlook for the foodservice industry, reached 101.0 in April, an increase of 0.4 percent over March’s level of 100.6.
This marks the third time in the last four months that the RPI stood above the 100.0 level, which signifies expansion in key industry indicators.
“Growth in the Restaurant Performance Index was due largely to restaurant operators’ healthier outlook for the business environment in the coming months,” said Hudson Riehle, the NRA’s senior vice president of the Research and Knowledge Group. “In particular, there was a drop off in the proportion of operators who expect conditions to worsen in the months ahead, which suggests a broadening of the perspective that the expansion is firmly entrenched.”
The RPI consists of two components — the Current Situation Index, which addresses 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 0.3 percent in April to 100.1, up from 99.8 in March. This marks the first time in eight months that the Current Situation Index stood above the 100 mark.
Forty-nine percent of restaurateurs said they posted same-store sales gains between April 2012 and April 2013, an increase from 44 percent who reported higher sales in March. By comparison, 33 percent of operators saw a decline in same-store sales in April, down from 37 percent in March.
But while sales were positive in April, operators said customer traffic declined for the fifth consecutive month. Thirty-six percent of restaurateurs reported higher customer traffic levels between April 2012 and April 2013, compared with 40 percent who said traffic had slipped. In March 34 percent said customer traffic had increased, compared with 42 percent who reported lower traffic levels.
The Expectations Index rose to 101.9 in April, an increase of 0.5 percent over March and the index’s highest level in 11 months. The NRA also said the four Expectations indicators were above 100 for the fourth consecutive month, which reflects a more upbeat mood among operators concerning business conditions in the future.
Forty-one percent of operators anticipate that their sales will improve in the coming months compared with the same period in the previous year, down slightly from last month when 44 percent expected sales to rise.
However, only 10 percent of operators expect sales in six months to be lower than they were during the same period in the previous year.
In addition, only 13 percent said they were bearish about future economic conditions, down from 20 percent last month who anticipated that conditions in six months will have declined.
The RPI is based on the responses to the NRA’s monthly tracking survey.