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Restaurant Industry Outlook Remains Positive

National Restaurant Assn.’s Restaurant Performance Index (RPI), A Monthly Composite Index Tracking Health and Outlook for the U.S. Restaurant Industry, Stood at 100.9 in April, Essentially Unchanged from 101.0 in March

Buoyed by positive same-store sales and solid optimism among restaurant operators for continued growth, the outlook for the restaurant industry remained positive in April.

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 100.9 in April, essentially unchanged from a level of 101.0 in March. In addition, April represented the fifth consecutive month in which the RPI stood above 100, which signifies expansion in the index of key industry indicators.

“The restaurant industry continued to build momentum in April, with restaurant operators reporting positive same-store sales and customer traffic levels for the sixth time in the last eight months,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “Barring any significant external shocks, restaurant sales and traffic levels will continue to improve in the months ahead.”

Restaurant operators continued to report net positive same-store sales results in April. 50% of restaurant operators reported a same-store sales gain between April 2010 and April 2011, down slightly from 52% of operators who reported higher same-store sales in March. In comparison, 31% of operators reported a same-store sales decline in April, matching the proportion of operators who reported lower sales in March.

Restaurant operators also reported a net increase in customer traffic in April, although levels were somewhat softer than the March results. 38% of restaurant operators reported an increase in customer traffic between April 2010 and April 2011, down from 45% of operators who reported higher traffic in March. In comparison, 35% of operators reported a traffic decline in April, up from 32% in March.

Capital spending activity among restaurant operators trended upward in recent months. 48% of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, the highest level in nearly three years.

However, restaurant operators reported a slight dropoff in plans for capital spending in the months ahead. 49% of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, down slightly from 53% who reported similarly last month.

Reprint from CoStar.com      By Mark Heschmeyer
Categories: Uncategorized
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