Same-store sales and traffic inched up in April, driving a slight 0.3-point increase in the National Restaurant Association’s Restaurant Performance Index, or RPI.
The RPI rose to 101.7 in April, from 101.4 in March, and the highest level since May 2013. The monthly composite index tracks the health of and outlook for the U.S. restaurant industry and has remained above 100 for 14 consecutive months, which signifies a period of expansion.
“The recent rise in the RPI was fueled by improvements in same-store sales and customer traffic, which are back on a positive trajectory after the winter soft patch,” said Hudson Riehle, senior vice president of the NRA’s research and knowledge group.
Restaurant Industry Update: May 2014
“Restaurant operators have an optimistic outlook for business conditions in the months ahead,” Riehle said, “which is reflected by the expectations component of the RPI rising to its highest level in two years.”
The RPI consists of two components: the Current Situation Index and the Expectations Index.
The Current Situation Index, which measures same-store sales, traffic, labor and capital expenditures, stood at 101.3 in April, rising 0.5 points from a level of 100.8 in March.
For the second consecutive month, a majority of restaurant operators reported higher same-store sales: 51 percent of restaurant operators reported a same-store sales gain between April 2013 and April 2014, while 26 percent reported a sales decline. By comparison, 55 percent of operators in March reported higher same-store sales, while 32 percent said their sales declined.
Restaurant operators reported a net gain in customer traffic levels for the second straight month, after registering declines in the prior three months.
Along with positive trends in sales and customer traffic, restaurant operators reported continued growth in capital expenditures: 56 percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, an increase from 49 percent who reported similarly in the prior month.
The overall Expectations Index stood at 102.2 in April, up 0.2 points from March. The Expectations Index measures restaurant operators’ six-month outlook for same-store sales, employees, capital expenditures and business conditions.
April’s measure represented the 18th consecutive month in which the Expectations Index stood above 100, which indicates operator optimism about business conditions in the coming months.
Forty-six percent of restaurant operators said they expect to see higher sales in six months, a slight decrease from 49 percent who thought so in March. And 11 percent said sales volume in the next six months would be lower than during the same period last year, a rise from 6 percent in the March survey.
Operator outlook for the overall economy was improved over March’s survey, with 30 percent saying they expect economic conditions to improve in the next six months and 15 percent expecting the economy to worsen. The remaining 55 percent expect economic conditions to remain generally unchanged.
About 60 percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, up slightly from 58 percent who reported similarly last month.
The full RPI report can be found online at the NRA’s website.
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