Restaurant same-store sales and customer traffic levels continued to improve in November, boosting the National Restaurant Association’s Restaurant Performance Index to a five-month high.
The NRA’s Restaurant Performance Index, or RPI, a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry, reached 101.2 in November, a 0.3-percent increase from October and the strongest level since June.
In addition, the RPI stood above 100 for the ninth consecutive month, signifying the expansion of key industry indicators, according to the NRA.
“Recent growth in the RPI was fueled in large part by improving same-store sales and customer-traffic levels,” said Hudson Riehle, senior vice president of the NRA’s research and knowledge group. “In addition, restaurant operators are somewhat more confident that sales levels will improve, and a majority plan to make capital expenditures in the next six months.”
The RPI includes two components. The Current Situation Index measures current trends in four key indicators: same-store sales, traffic, labor and capital expenditures. The Expectations Index measures the outlook of operators over the next six months on same-store sales, employees, capital expenditure and business conditions.
In November, the Current Situation Index was 101.2, an increase of 0.3 percent from 100.9 in October and the highest level in six months.
Aside from a downtick in September, the Current Situation Index remained above 100 in seven of the last eight months, which represents a positive trend of expansion, the NRA said.
In terms of same-store sales, 57 percent of operators said they saw gains in November over the same month last year, up from 54 percent in October and the highest level in six months. By comparison, 29 percent of operators reported same-store sales declines in November, down slightly from 30 percent in October.
Customer traffic levels also improved in November, with 47 percent of operators reporting traffic growth compared with November 2012. In October, 43 percent of operators reported traffic gains compared with the same period last year.
Alternatively, 35 percent of operators reported a loss in traffic in November compared with the prior year, down from 39 percent who reported a loss in October.
With sales and traffic improving, 54 percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, the NRA said. It was the seventh consecutive month in which a majority of operators reported making such investments.
The Expectations Index in November was 101.1, a 0.2-percent increase from 100.9 in October. November also represented the 13th consecutive month in which the Expectations Index stood above 100, indicating that operators are generally optimistic about business conditions ahead.
In November, 38 percent of operators expect to have higher sales over the next six months compared with the same period last year, up slightly from 36 percent who said the same in October.
Only 9 percent of operators expected their sales volume to decline over the next six months, while about 53 percent said they expect sales to be about the same.
Still, operators were less optimistic about the economy overall. Only 24 percent said they expect economic conditions to improve over the next six months, while 19 percent said they expect the climate to worsen. A majority of operators surveyed — 57 percent — expect the economy to continue trending sideways, the NRA said.
Despite that uncertainty, 55 percent of operators are planning to make a capital expenditure for equipment, expansion or remodeling in the next six months, up slightly from 53 percent who said the same in October.
The RPI is based on the NRA’s monthly Tracking Survey, which includes responses from restaurant operators nationwide.
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