Store sales, traffic boost Restaurant Performance Index
Jan. 2, 2014
by Keith Nunes
WASHINGTON — The food service sector may be on the upswing as the National Restaurant Association’s Restaurant Performance Index rose 0.3% in November to 101.2. The N.R.A. credited the increase to same-store sales and improved customer traffic.
The R.P.I. consists of two components — the current situation index and the expectations index. The current situation index includes data regarding same-store sales, restaurant traffic, labor and capital expenditures. A majority of restaurant operators reported higher same-store sales for the second consecutive month in November. Fifty-seven per cent said they recorded a same-store sales gain between November 2012 and November 2013, up from 54% in October and the highest level in six months. In comparison, 29% of operators reported a decline in same-store sales in November, compared to 30% in October.
Operators also reported improving customer traffic levels in November. Forty-seven per cent of restaurant operators reported customer traffic growth between November 2012 and November 2013, up from 43% who reported a traffic gain in October. In comparison, 35% of operators reported a decline in customer traffic in November, down from 39% in October.
The R.P.I.’s expectations index is a six-month outlook of four industry indicators, same-store sales, employees, capital expenditures and business conditions. Restaurant operators are generally positive about sales expectations in the months ahead. Thirty-eight per cent of operators expect to have higher sales in six months (compared to the same period in the previous year), up slightly from 36% who reported similarly in October. Meanwhile, only 9% of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year, while 53% expect their sales to remain about the same.
In comparison, restaurant operators are less optimistic about the direction of the economy. Twenty-four per cent said they expect economic conditions to improve in six months, while 19% expect the economy to worsen. The remaining 57% expect the economy to continue trending sideways during the next six months.