Fueled by stronger same-store sales and traffic and a more optimistic outlook among restaurant operators, the National Restaurant Association’s Restaurant Performance Index (RPI) rose to a four-month high in October. The RPI stood at 100.9 in October, up 0.7 percent from September and the strongest level since June. In addition, the RPI stood above 100 for the eighth consecutive month, which signifies expansion in the index of key industry indicators.
“The RPI’s October gain was driven by broad-based gains in the index components, most notably solid improvements in same-store sales and customer traffic,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association.
“Looking forward, restaurant operators are relatively optimistic about sales growth in the months ahead, though their outlook for the overall economy remains mixed,” Riehle added.
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 100.9 in October – up 1.0 percent from a level of 99.9 in September and the highest level in five months. With the exception of September’s dip, the Current Situation Index remained above 100 in six of the last seven months, which represents expansion in the current situation indicators.
A majority of restaurant operators reported higher same-store sales in October, and the results were a solid improvement over September’s performance. Fifty-four percent of restaurant operators reported a same-store sales gain between October 2012 and October 2013, up from 41 percent who reported higher sales in September. In addition, 43 percent of restaurant operators reported higher customer traffic levels between October 2012 and October 2013, up from 33 percent who reported a traffic gain in September.
Along with higher sales and customer traffic, restaurant operators continued to report positive capital spending levels, with 57 percent saying they made a capital expenditure for equipment, expansion or remodeling during the last three months, the sixth consecutive month in which a majority of operators reported expenditures.
The Expectations Index also stood at 100.9, up 0.4 percent from September. Restaurant operators’ outlook for sales growth in the months ahead remains cautiously optimistic, but they remain mixed about the direction of the economy. Despite an uncertain outlook for the economy, a majority of restaurant operators are planning for capital expenditures in the months ahead.
More details are available at Restaurant.org/RPI and Restaurant TrendMapper (subscription required).