R.P.I. indicates a more positive outlook among restaurant operators
by Keith Nunes
WASHINGTON – A 0.4% increase in the National Restaurant Association’s April Restaurant Performance Index largely was driven by a more positive outlook among the food service operators surveyed, according to the association. The R.P.I. hit a 10-month high in April, settling at 101 and an improvement over the March R.P.I. of 100.6.
“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 R.P.I. 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% compared with March. Restaurant operators reported stronger same-store sales results in April, with 49% reporting a same-store sales gain between April 2012 and April 2013, up from 44% in March. Meanwhile, 33% of operators reported a drop in same-store sales in April, down from 37% 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 per cent of restaurant operators said they experienced higher customer traffic levels between April 2012 and April 2013, while 40% said traffic declined. In March, 34% of operators reported an increase in customer traffic, while 42% reported lower traffic levels.
The R.P.I.’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% 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% in March. However, only 10% 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% 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% said they expect economic conditions to worsen in the next six months, down from 20% last month and the lowest level in 12 months. Meanwhile, 28% of restaurant operators said they expect economic conditions to improve in six months, down from 32% who reported similarly last month.