Original at Calculated Risk
National Restaurant Association: Restaurant Industry Outlook Improved in February as Restaurant Performance Index Stood Above 100 for the Fifth Time in Six Months
Sales and traffic levels rose in February; Capital spending outlook hit a 40-month high
March 31, 2011
(Washington, D.C.) Driven by improving same-store sales and customer traffic levels as well as growing optimism among restaurant operators, the outlook for the restaurant industry improved in February. 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 – stood at 100.7 in February, up 0.4 percent from its January level. In addition, February represented the fifth time in the last six months that the RPI stood above 100, which signifies expansion in the index of key industry indicators.Oh, wow, great news!
“February’s RPI gain was driven by solid improvements in the same-store sales and customer traffic indicators,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “Restaurant operators reported positive same-store sales and customer traffic results in February, after January’s results were dampened by extreme weather conditions in many parts of the country.”
“In addition to improving sales and traffic indicators, restaurant operators’ outlook for capital spending hit a 40-month high, while their expectations for staffing growth rose to the highest level in nearly four years,” Riehle added.
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 February – up 0.9 percent from its January level. However, the Current Situation Index remained below 100 for the fourth consecutive month, as the softness in the labor and capital expenditure indicators outweighed the gains in same-store sales and customer traffic.Don't worry, spending and employment will follow!
Restaurant operators reported a solid improvement in same-store sales in February. Forty-nine percent of restaurant operators reported a same-store sales gain between February 2010 and February 2011, up from 39 percent of operators who reported higher same-store sales in January. In comparison, 37 percent of operators reported a same-store sales decline in February, down from 44 percent of operators who reported lower sales in January.See, I told you, good news!
Restaurant operators also reported a net increase in customer traffic levels in February. Forty-one percent of restaurant operators reported an increase in customer traffic between February 2010 and February 2011, up from 35 percent of operators who reported higher traffic in January. In comparison, 39 percent of operators reported a traffic decline in February, down from 44 percent in January.
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 101.9 in February – up slightly from January’s level of 101.8. In addition, the Expectations Index stood above the 100 level for the seventh consecutive month, which signifies expansion in the forward-looking indicators.See, I told you, nothing but good news, as the restaunteurs think things will improve for them! Business as usual will resume!
Restaurant operators remain solidly optimistic that their sales levels will improve in the months ahead. Forty-eight percent of restaurant operators expect to have higher sales in six months (compared to the same period in the previous year), up slightly from 47 percent who reported similarly last month. In comparison, just 12 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 14 percent who reported similarly last month.
Bolstered by an improving sales outlook, restaurant operators’ plans for capital spending rose to its highest level in 40 months. Fifty-two percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, up from 48 percent who reported similarly last month.
For the fifth consecutive month, restaurant operators reported a positive outlook for staffing gains in the months ahead. Twenty-six percent of restaurant operators plan to increase staffing levels in six months (compared with the same period in the previous year), while just 10 percent said they expect to reduce staffing levels in six months.
While restaurant operators are bullish about their sales prospects in the months ahead, they are somewhat less optimistic about the direction of the overall economy. Thirty-four percent of restaurant operators said they expect economic conditions to improve in six months, down from 42 percent who reported similarly last month and the lowest level in six months. In comparison, 14 percent of operators said they expect economic conditions to worsen in the next six months, up from 10 percent who reported similarly last month.April Fools!
Hey, what did you expect out of me today, a rickroll?