US restaurant outlook grows brighter
Jan. 3, 2012
by Meat&Poultry Staff
WASHINGTON – The National Restaurant Association’s Restaurant Performance Index (RPI) reached its highest level in five months in November. It was driven by positive same-store sales and a more optimistic outlook among restaurant operators.
A monthly composite index that tracks the health of and outlook for the US restaurant industry, the RPI stood at 100.6 in November, up 0.6 percent from October. November represents the second time in the last three months the RPI was above 100, which signifies expansion in the index of key industry indicators.
The November increase in the RPI was fueled by broad-based gains in both the current situation and forward-looking indicators, said Hudson Riehle, senior vice president of the Research and Knowledge Group for the association. “Restaurant operators reported their strongest net positive same-store sales results in more than four years, while customer traffic levels also grew in November,” he added.
The health of the US restaurant industry is measured under the RPI in relation to a steady-state level of 100. Index values more than 100 indicate that key industry indicators are in a period of expansion, and index values less than 100 represent a period of contraction for key industry indicators. The RPI consists of two components, the Current Situation Index and the Expectations Index.
Measuring current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), the Current Situation Index stood at 100.2 in November – up 0.8 percent from October’s level of 99.5. November marked the second time in the last three months that the Current Situation Index stood above 100, which signifies expansion in the current situation indicators.
In November, restaurant operators reported positive, same-store sales for the sixth consecutive month. Fifty percent of restaurant operators reported a same-store sales gain between November 2010 and November 2011, while just 28 percent reported a same-store sales decline. This marked the strongest net positive sales performance since August 2007.
Restaurant operators also reported stronger customer traffic levels in November. Forty-one percent of restaurant operators reported higher customer traffic levels between November 2010 and November 2011, while 32 percent of operators reported a traffic decline.
The Expectations Index, which measures restaurant operators’ six-month outlook for four industry indicators (same-store sales, employees, capital expenditures and business conditions), stood at 100.9 in November – up 0.4 percent from October and the third consecutive monthly gain.
Restaurant operators are more optimistic about sales growth in the months ahead. Forty-one percent of restaurant operators expect to have higher sales in six months compared to the same period in the previous year, up from 35 percent who reported similarly last month.
Twenty-seven percent of restaurant operators expect economic conditions to improve in six months, up slightly from 26 percent who reported similarly last month. In comparison, 16 percent of operators said they expect economic conditions to worsen in the next six months, down from 22 percent who reported similarly last month.