“The August gain in the R.P.I. was fueled by stronger same-store sales and customer traffic results, aided by continued improving economic conditions,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the association. “Looking forward, restaurant operators remain generally optimistic about continued sales growth, while a majority plans to make a capital expenditure in the next six months. However, operators still report food costs and government among top challenges that continue to negatively affect the operating environment.”
The monthly composite index tracks the health of and outlook for the US restaurant industry. Index values above 100 indicate that key industry indicators are in a period of expansion. The index has two components, the Current Situation Index and the Expectations Index.
The Current Situation Index, which measures the indicators of same-store sales, traffic, labor and capital expenditures, stood at 101.8 in August, which was up 1.1 percent from July and the strongest level in three months. Sixty-two percent of restaurant operators reported a same-store sales gain between August 2013 and August 2014, which was up from 54 percent in July. Twenty-one percent reported a same-store sales decline in August, which compared to 30 percent in July.
The Expectations Index measures restaurant operators’ six-month outlook for the four industry indicators of same-store sales, employees, capital expenditures and business conditions. The Expectations Index stood at 102.1 in August, up 0.9 percent from July and the highest level in three months. Forty-five percent of restaurant operators expect to have higher sales in six months when compared to the same period in the previous year, which was down from 47 percent in July. Five percent expect sales volume to be lower, which was down from 13 percent in July.
The Expectations Index also showed 27 percent of restaurant operators said they expect economic conditions to improve in six months while 13 percent expect the economy to worsen. The remaining 60 percent expect economic conditions to be about the same as they are now.