Traffic trends softened in June, but restaurant operators remain bullish about the months ahead, according to the monthly Restaurant Performance Index by the National Restaurant Association.
The RPI, a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry, stood at 101.3 in June, falling from 102.1 in May and the first decline in four months.
Still, June marked the 16th consecutive month with a score above 100, which indicates expansion on the key indicators measured. Index values below 100 represent a period of contraction for those indicators.
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“Although overall same-store sales remained positive in June, the RPI dipped as a result of softer customer traffic levels,” said Hudson Riehle, senior vice president of the NRA’s research and knowledge group. “Looking forward, restaurant operators are generally optimistic about sales growth in the months ahead, and their outlook for capital spending remains near post-recession highs.”
The index consists of two components: the Current Situation Index and the Expectations Index.
The Current Situation Index measures four key indicators, including same-store sales, traffic, labor and capital expenditures.
In June, the index stood at 100.9, falling 1.1 percent from May and the first decline in four months.
Over the past four months, most restaurant operators reported higher same-store sales, though overall results softened slightly compared with their May performance. According to the survey, 55 percent reported a same-store sales gain in June compared with the prior year, a decline from 65 percent who said the same in May.
Twenty-seven percent said same-store sales declined, an increase from the 19 percent who reported similar results in May.
Operators also struggled with getting guests through the door in June, with 39 percent reporting increased traffic — falling from 47 percent in May. Another 41 percent said traffic declined, rising from 29 percent in May.
Despite those softened trends, 53 percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, which was about the same as in May.
The Expectations Index measures restaurant operators’ outlook on same-store sales, employees, capital expenditures and business conditions for the months ahead.
That index stood at 101.7 in June, falling from 102.2 in both April and May. Despite that, the Expectations Index has been above 100 for 20 consecutive months, indicating that operators are optimistic about the rest of the year.
Forty-four percent said they expect higher sales over the next six months, a decline from 50 percent who said the same in May.
Alternatively, only 10 percent of operators said they expect their sales volume to be lower, though that was an increase compared with the 8 percent who expected lower sales last month.
Most operators don’t expect much change in terms of the economy, with 55 percent expecting the climate to remain the same over the next six months. Another 27 percent said they expect conditions to improve, while 18 percent expect worse.
However, 59 percent also are planning to make capital expenditures for equipment, expansion or remodeling over the next six months, down slightly from the 62 percent who intended to make such investments last month.
The RPI is based on responses to the NRA’s Restaurant Industry Tracking Survey. The full report can be found at Restaurant TrendMapper.
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