Restaurant Performance Index Shows August Gains
WASHINGTON -- Driven by stronger same-store sales and customer traffic levels and a more optimistic outlook among restaurant operators, the National Restaurant Association’s Restaurant Performance Index posted a solid gain in August. The index stood at 101.9 in August, up 1% from July and its first gain in three months.
In addition, the index stood above 100 for the 18th consecutive month, which signifies expansion in the index of key industry indicators. “The August gain was fueled by stronger same-store sales and customer traffic results, aided by continued improving economic conditions,” said Hudson Riehle, senior vice president of the association’s research and knowledge group.
“Looking forward, restaurant operators remain generally optimistic about continued sales growth, while a majority plans to make a capital expenditure in the next six months. However, operators still report food costs and government among top challenges that continue to negatively affect the operating environment,” Riehle continued.
The index consists of 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.
The current situation index stood at 101.8 in August, up 1.1% from July and the strongest level in three months. In addition, the current situation index stood above 100 for the sixth consecutive month, which signifies expansion in the current situation indicators. Restaurant operators reported stronger same-store sales results in August, with a majority indicating higher sales for the sixth consecutive month, as well as positive customer traffic results.
The expectations index stood at 102.1 in August, up 0.9% from July and the highest level in three months. August also represented the 22nd consecutive month in which the expectations index stood above 100, which indicates restaurant operators are generally optimistic about business conditions in the coming months.
In addition, 59% of operators reported making a capital expenditure for equipment, expansion or remodeling during the last three months, up from 50% who reported similarly last month. Similarly, 59% of restaurant operators also plan to make a capital expenditure in the next six months.
Published by The Business Journal, Youngstown, Ohio.
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