Restaurant index climbs amid capital expenditures

by Jeff Gelski
Share This:
Search for similar articles by keyword: [N.R.A.], [Food Service], [Consumers]
WASHINGTON — The Restaurant Performance Index, which tracks the health and outlook for the US restaurant industry, stood at 102.9 in December, which was up 0.8 percent from 102.1 in November.

“Growth in the RPI was driven by the current situation indicators in December, with a solid majority of restaurant operators reporting higher same-store sales and customer traffic levels,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Washington-based National Restaurant Association. “In addition, 6 in 10 operators reported making a capital expenditure during the fourth quarter, with a similar proportion planning for capital spending in the first half of 2015.

“Overall, the RPI posted three consecutive months above 102 for the first time since the first quarter of 2006, which puts the industry on a positive track heading into 2015.”

Index values above 100 mean key industry indicators are in a period of expansion. Two components, the Current Situation Index and the Expectations Index, make up the RPI.

The Current Situation Index stood at 102.9 in December, up from 101.4 in November. The index measures same-store sales, traffic, labor and capital expenditures. In December, 60 percent of restaurant operators said they had made a capital expenditure for equipment, expansion or remodeling during the past three months, which was up from 54 percent in November.

Seventy-one percent of operators reported a same-store sales gain between December 2013 and December 2014, which compared to 57 percent between November 2013 and November 2014. Same-store sales declines were reported by 19 percent of operators in December, which compared to 21 percent in November.

Consumer traffic picked up, too, as 61 percent of operators reported an increase between December 2013 and December 2014, which was up from 45 percent between November 2013 and November 2014. Consumer traffic declines between December 2013 and December 2014 were reported by 23 percent of operators, which compared to 30 percent between November 2013 and November 2014.

The Expectations Index stood at 102.9 in December, up from 102.8 in November. The index measures six-month outlooks for same-store sales, employees, capital expenditures and business conditions.

For the 16th straight month a majority of restaurant operators said they are planning for capital expenditures as 62 percent in December said they plan to spend money on equipment, expansion or remodeling in the next six months, which was up from 57 percent in November.

Compared to the same period in the previous year, 52 percent of restaurant operators in December said they expect to have higher sales in the next six months, which was down from 57 percent who said so in November. Only 5 percent in December said they expect sales volume to be lower over the next six months, which compared to 7 percent who said so in November.

Restaurant operators’ views on the overall economy declined slightly, too, as 37 percent in December said they expect economic conditions to improve in six months, which compared to 41 percent in November. Only 7 percent in December said they expect economic conditions to get worse over the next six months while 56 percent expect conditions to be about the same as they are now.
Comment on this Article
We welcome your thoughtful comments. Please comply with our Community rules.

 

 


The views expressed in the comments section of Meat and Poultry News do not reflect those of Meat and Poultry News or its parent company, Sosland Publishing Co., Kansas City, Mo. Concern regarding a specific comment may be registered with the Editor by clicking the Report Abuse link.