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Restaurant Performance Index Hits 10-Month High as Operators? Business Expectations Improve

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June 3, 2013

Restaurant Performance Index Hits 10-Month High as Operators? Business Expectations Improve

(Washington, D.C.)? Driven by higher same-store sales and an improving outlook among restaurant operators, the National Restaurant Association?s?Restaurant Performance Index?(RPI) hit a 10-month high in April.? The RPI ? a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry ? stood at 101.0 in April, up 0.4 percent from a level of 100.6 in March.? In addition, April represented the third time in the last four months that the RPI topped the 100 level, which signifies expansion in the index of key industry indicators.

?Growth in the Restaurant Performance Index was due largely to restaurant operators? healthier outlook for the business environment in the coming months,? said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association.? ?In particular, there was a dropoff in the proportion of operators who expect conditions to worsen in the months ahead, which suggests a broadening of the perspective that the expansion is firmly entrenched.?

The RPI is constructed so that the health of the restaurant industry is measured in relation to a steady-state level of 100. Index values above 100 indicate that key industry indicators are in a period of expansion, while index values below 100 represent a period of contraction for key industry indicators. The Index consists of two components ? the Current Situation Index and the Expectations Index.

The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 100.1 in April ? up 0.3 percent from a level of 99.8 in March.? April represented the first time in eight months that the Current Situation Index rose above 100, which signifies expansion in the current situation indicators.

Restaurant operators reported stronger same-store sales results in April.? Forty-nine percent of restaurant operators reported a same-store sales gain between April 2012 and April 2013, up from 44 percent who reported higher sales in March.? Meanwhile, 33 percent of operators reported a drop in same-store sales in April, down from 37 percent in March.

While overall sales were positive in April, restaurant operators reported a net decline in customer traffic for the fifth consecutive month.? Thirty-six percent of restaurant operators reported higher customer traffic levels between April 2012 and April 2013, while 40 percent of operators said their traffic declined.? In March, 34 percent of operators reported an increase in customer traffic, while 42 percent reported lower traffic levels.

Restaurant operators reported a slight dip in capital spending activity from recent months.? Forty-seven percent of operators saying they made a capital expenditure for equipment, expansion or remodeling during the last three months, down from 51 percent who reported similarly last month.

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Source Press Release

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