“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 association’s research and knowledge group. “In particular, there was a drop-off 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 consists of two benchmarks, the current situation index and the expectations index. The current situation index was 100.1 in April, an increase of 0.3 percent compared with March. Restaurant operators reported stronger same-store sales results in April, with 49 percent reporting a same-store sales gain between April 2012 and April 2013, up from 44 percent 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 said they experienced higher customer traffic levels between April 2012 and April 2013, while 40 percent said traffic declined. In March, 34 percent of operators reported an increase in customer traffic, while 42 percent reported lower traffic levels.
The RPI’s expectations index, which measures restaurant operators’ six-month outlook for four industry indicators, including same-store sales, employees, capital expenditures and business conditions, stood at 101.9 in April – up 0.5 percent from March and the highest level in 11 months. Each of the expectations indicators stood above 100 for the fourth consecutive month, which indicates a firming of optimism for business conditions in the months ahead.
Restaurant operators remain generally optimistic that their sales will improve in the coming months. Forty-one per cent expect to have higher sales in six months compared to the same period in the previous year, down slightly from 44 percent in March. However, only 10 percent of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year, down from 15 percent last month and the lowest level in 11 months.
Similarly, a smaller proportion of operators are bearish about the economy in the months ahead. Only 13 percent said they expect economic conditions to worsen in the next six months, down from 20 percent last month and the lowest level in 12 months. Meanwhile, 28 percent of restaurant operators said they expect economic conditions to improve in six months, down from 32 percent who reported similarly last month.