The National Restaurant Association’s Restaurant Performance Index slipped slightly in November as sales and traffic fell modestly from the prior month. However, operators remained optimistic about business conditions, according to a report released Tuesday.
The index, a monthly composite that tracks the health of and outlook for the U.S. restaurant industry, was 102.1 in November, a slight decrease from its October level of 102.8.
November’s index marked the 21st consecutive month in which the RPI stood above 100, which signifies expansion in key industry indicators, the NRA said.
“The RPI registered a modest decline in November, as sales and customer traffic results were somewhat softer than their solid October levels,” said Hudson Riehle, senior vice president of the NRA’s research and knowledge group.
“However,” Riehle added, “a majority of restaurant operators still reported higher same-store sales in November, and they are increasingly optimistic that business conditions will continue to improve in the months ahead.”
The NRA's Hudson Riehle breaks down the latest RPI results >>
The RPI is based on responses to the NRA’s monthly tracking survey of operators nationwide on both current and expected measures. Prior-month results are released at the end of each month. The Current Situation Index fell slightly from October, and the Expectations Index inched up in the November survey.
Index values above 100 indicate that key industry indicators are in a period of expansion.
The Current Situation Index, which measures same-store sales, traffic, labor and capital expenditures, stood at 101.4 in November, a 1.6-percent decrease from 103.1 in October. Fifty-seven percent of restaurant operators reported a same-store sales gain between November 2013 and November 2014, a decrease from 71 percent who reported higher sales in October. In comparison, 21 percent of operators reported a same-store sales decline in November, an increase from 11 percent in October.
November restaurant traffic also declined, compared with October, the survey found. Forty-five percent of restaurant operators reported an increase in traffic in the month, falling from 55 percent who reported higher traffic in October. Thirty percent of operators said traffic declined in November, rising from 16 percent who reported declines in October.
The Expectations Index, which measures operators’ six-month outlook for same-store sales, employees, capital expenditures and business conditions, stood at 102.8 in November, a 0.3-percent gain from 102.5 in October. It was the 25th consecutive month that expectations stood above 100, which the NRA said indicates restaurant operators are optimistic that business conditions will continue to improve.
A majority of restaurant operators expected their sales to rise in the coming months. Fifty-seven percent of operators said they expect higher sales in the next six months, an increase from 52 percent with that expectation in October. Only 7 percent of restaurant operators expected their sales volume in six months to be lower than it was during the same period the previous year, compared with 6 percent last month.
Restaurant operators also expressed more optimism about the overall economy. Forty-one percent of operators said they expected economic conditions to improve in six months, an increase from 35 percent last month. That was the highest level in nearly four years, the NRA said. Only 8 percent expected economic conditions to worsen in six months, while the remaining 51 percent thought economic conditions in six months would be about the same.
Operators continued to foresee more capital expenditures. Fifty-seven percent said they planned for new equipment, expansion or remodeling in the next six months, a slight decrease from 59 percent who reported similarly in October. That marked the 15th consecutive month that operators expressed plans for increased spending.
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