Restaurant Performance Index Hits 14-Month High
WASHINGTON -- Buoyed by stronger same-store sales and higher customer traffic, the National Restaurant Association’s Restaurant Performance Index hit a 14-month high in May. The index stood at 101.8, up 0.9% from April and was the third consecutive monthly gain.
May also represented the third straight month that the index topped 100, which signifies expansion in the index of key industry indicators. “The May increase in the Restaurant Performance Index was driven by broad-based gains in the current situation indicators, most notably positive same-store sales and customer traffic results,” said Hudson Riehle in a prepared statement. Riehle is senior vice president of the research and knowledge group for the association.
The index has two components – the current situation index (measuring current trends) and the expectations index (measuring restaurant operators' six-month outlook) – and tracks the health of and outlook for the U.S. restaurant industry.
Current situation was 101.6, up 1.6% from 100.1 in April. May represented the strongest reading of that index since March 2012. A majority of restaurant operators reported higher same-store sales, and the overall results were a solid improvement over April. Restaurant operators also reported a net gain in customer traffic levels in May.
The expectations index was 102.0, the strongest level in 12 months. Each of the four expectations indicators exceeded 100 for the fifth consecutive month, an indicator of broad-based optimism for business conditions in the coming months. While restaurant operators are increasingly optimistic about their sales prospects in the months ahead, they are not as bullish about the direction of the economy.
Restaurant operators continue to plan for capital spending, with 57% planning to buy equipment, expand or remodel in the next six months, down slightly from 59% who reported similarly last month.
Operators also are generally positive on maintaining or adding to their staffs; 21% plan to increase levels in six months (compared to the same period in the previous year) and only 8% plan to cut positions.
Along with the positive sales and traffic results, restaurant operators reported an increase in capital spending activity. Fully 52% of operators say they bought equipment, expandedn or remodeled during the last three months, up from 47% who reported similarly last month.
Published by The Business Journal, Youngstown, Ohio.
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