Industry

Restaurant Performance Index above 100 for 6th straight month

By Rachel Salabes May 31, 2012
NRA
The outlook for the restaurant industry remains positive for the coming months, as the National Restaurant Association's Restaurant Performance Index was well above 100 in April.

The RPI stood at 101.6 in April, down 0.6 percent from 102.2 in March. Despite the decline, April was the sixth consecutive month the RPI stood above 100. That signifies expansion in the index of key industry indicators.

"Although the Restaurant Performance Index dipped somewhat in April, it remained solidly in positive territory," said Hudson Riehle, senior vice president, research and knowledge, NRA. "Restaurant operators reported positive same-store sales for the 11th consecutive month, and a majority of them expect business to continue to improve in the months ahead."

The RPI consists of two components: the Current Situation Index, which measures current trends, and the Expectations Index, which measures restaurant operators' six-month outlook. It also tracks the health of and outlook for the U.S. restaurant industry.

The Current Situation stood at 101 in April - down 1 percent from March. The Current Situation Index remained above 100 for the sixth straight month.

Fifty-seven percent of restaurant operators reported same-store sales gains between April 2011 and April 2012, down from 65 percent in March. Meanwhile, 25 percent of operators reported lower same-store sales in April, up from 21 percent who reported similarly in March.

Restaurant operators also reported somewhat softer customer traffic in April. Forty-six percent of restaurant operators reported higher customer traffic levels between April 2011 and April 2012, down from 55 percent in March. In comparison, 30 percent of operators reported lower customer traffic levels in April, up from 24 percent in March. Additionally, 44 percent of operators said they made a capital expenditure for equipment, expansion or remodeling in the last three months, down from 48 percent who reported similarly last month.

The Expectations Index stood at 102.2 in April - down from a 15-month high of 102.4 in March. April also was the eighth consecutive month that the Expectations Index stood above 100, which signifies a positive outlook among restaurant operators for business conditions in the coming months.

For the fifth straight month, a majority of restaurant operators said they expected their sales to be higher in the months ahead. Fifty-two percent of restaurant operators said they expected to have higher sales in six months (compared to the same period in the previous year), essentially unchanged from the previous four months.

In comparison, only 8 percent of restaurant operators said they expected their sales volume in six months to be lower than it was in the same period in the previous year.

Restaurant operators also continue to plan for capital spending in the months ahead. Fifty-two percent of restaurant operators said they planned to make a capital expenditure for equipment, expansion or remodeling in the next six months, down slightly from 56 percent who reported similarly last month.