Buoyed by positive sales results and a more optimistic outlook among restaurant operators, the National Restaurant Association’s Restaurant Performance Index (RPI) rose above 100 in March. The RPI stood at 100.6 in March, up 0.7 percent from February’s level of 99.9. March represented the second time in the last three months that the RPI stood above 100, which signifies expansion in the index of key industry indicators.
“The Restaurant Performance Index gain was driven by stronger same-store sales results in March, with comparisons aided by the Easter holiday occurring during the month,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “In addition, restaurant operators are somewhat more confident in the economy and a majority plan to make a capital expenditure in the next six months.”
The RPI consists of two components – the Current Situation Index (measuring current trends) and the Expectations Index (measuring restaurant operators' six-month outlook) - and tracks the health of and outlook for the U.S. restaurant industry.
The Current Situation Index stood at 99.8 in March – up 1.5 percent from February’s level. After reporting a same-store sales decline for the first time in 21 months, restaurant operators bounced back in March with a modest net gain. Forty-four percent of restaurant operators reported a same-store sales gain between March 2012 and March 2013, while 37 percent of operators reported lower sales. In February, only 33 percent of operators reported higher same-store sales, while 48 percent reported a sales decline.
While overall sales were positive in March, restaurant operators reported a net decline in customer traffic for the fourth consecutive month. Despite the mixed sales and traffic results, restaurant operators reported an increase in capital spending activity.
The Expectations Index stood at 101.4 in March – unchanged from February’s level. Each of the four expectations indicators stood above 100 for the third consecutive month, which suggests restaurant operators are optimistic about business conditions in the coming months. Restaurant operators remain generally optimistic that their sales will improve in the months ahead.
In addition, a majority of restaurant operators have plans for capital spending in the months ahead. Fifty-five percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, down slightly from 57 percent who reported similarly last month.
More details are available at Restaurant.org/RPI and Restaurant TrendMapper (subscription required).