Foodservice segment sees positive signs in Sept.
October 29, 2010
by Bryan Salvage
WASHINGTON – In September, the US restaurant industry outlook was brighter and it was driven by improving same-store sales and customer traffic levels, as well as increasing restaurant operator optimism.
Standing at 100.3 in September, the National Restaurant Association’s Restaurant Performance Index (RPI) – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry –was up 0.8% from its August level. The RPI also climbed above 100 for the first time in five months, which signifies expansion in the index of key industry indicators, NRA relays.
“The RPI’s solid gain in September was the result of broad-based improvements among both the current situation and forward-looking indicators,” said Hudson Riehle, NRA senior vice president of the research and knowledge group. “Restaurant operators reported positive same-store sales and customer traffic levels for the first time in six months, which propelled the RPI’s Current Situation Index to its highest level in nearly three years.”
“Restaurant operators are more optimistic about sales growth in the months ahead, while their outlook for the economy rose to its strongest level in five months,” Riehle added.
The RPI is constructed so the health of the restaurant industry is measured in relation to a steady-state level of 100. Index values above 100 indicate key industry indicators are in a period of expansion, and index values below 100 represent a period of contraction for key industry indicators. The RPI 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 99.4 in September – up 0.5% from August and its strongest level since October 2007. However, the Current Situation Index remained below 100 for the 37th consecutive month, as the softness in the labor and capital expenditure indicators outweighed the gains in same-store sales and customer traffic.
In September, restaurant operators reported a net increase in same-store sales for the first time in six months. Forty-four percent of restaurant operators reported a same-store sales gain between September 2009 and September 2010, up from 38% of operators who reported higher sales in August.
Restaurant operators also reported a slight uptick in customer traffic levels in September. Thirty-eight percent of restaurant operators reported an increase in customer traffic between September 2009 and September 2010, while 37% reported a traffic decline.
Measuring restaurant operators’ six-month outlook for four industry indicators (same-store sales, employees, capital expenditures and business conditions), the Expectations Index stood at 101.1 in September – up 1% from August and this marks its strongest level in five months.
Restaurant operators are more optimistic about an improving sales environment in the months ahead. Forty-three percent expect to have higher sales in six months (compared to the same period in the previous year), up from 38% who reported similarly last month.