As a result of softer same-store sales and customer traffic levels, the National Restaurant Association’s Restaurant Performance Index (RPI) registered a moderate decline in December. The RPI stood at 100.5 in December, down 0.6 percent from November and the first decline in three months. Despite the decline, the RPI remained above 100 for the 10th consecutive month, which signifies expansion in the index of key industry indicators.
“The December decline in the RPI was due to a dip in the current situation indicators, which in turn was partly caused by inclement weather in large parts of the country,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “Despite the softer December results, restaurant operators remain generally optimistic about business conditions in the months ahead.”
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 99.5 in December – down 1.7 percent from November and the lowest level in 10 months. Although restaurant operators reported net positive same-store sales in December, softness in the customer traffic and labor indicators outweighed the performance. Restaurant operators reported net positive same-store sales for the 10th consecutive month in December, but results were much softer than recent months.
Despite the dampened sales and traffic levels, restaurant operators continued to report positive capital spending levels. Fifty-two percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, the eighth consecutive month in which a majority of operators reported making expenditures.
The Expectations Index stood at 101.5 in December – up 0.4 percent from a level of 101.1 in November. In addition, December represented the 14th consecutive month in which the Expectations Index stood above 100, which indicates that restaurant operators remain generally optimistic about business conditions in the months ahead.
In addition, a majority of restaurant operators are planning for capital expenditures in the coming months. Sixty-one percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, up from 55 percent who reported similarly last month.
More details are available at Restaurant.org/RPI and Restaurant TrendMapper (subscription required).