The outlook for the US restaurant industry performed well in September, driven by improving same-store sales and customer traffic levels, as well as growing optimism among restaurant operators.
The National Restaurant Association’s Restaurant Performance Index (RPI) – a monthly composite index that tracks the health of and outlook for the US restaurant industry – stood at 100.3 in September, up a solid 0.8 per cent from its August level.
In addition, the RPI rose above 100 for the first time in five months, which signifies expansion in the index of key industry indicators, according to a report from the organisation.
“The RPI’s solid gain in September was the result of broad-based improvements among both the current situation and forward-looking indicators,” said Hudson Riehle, senior vice-president of the Research and Knowledge Group for the National Restaurant Association.
“Restaurant operators reported positive same-store sales and customer traffic levels for the first time in six months, which propelled the RPI’s Current Situation Index to its highest level in nearly three years.”
“In addition, restaurant operators are more optimistic about sales growth in the months ahead, while their outlook for the economy rose to its strongest level in five months,” Mr Riehle added. ??Restaurant operators also reported a net increase in same-store sales for the first time in six months in September.
Some 47 per cent of restaurant operators reported a same-store sales gain between September 2009 and September 2010, up from 38 per cent of operators who reported higher sales in August.
Meanwhile, 38 per cent of operators reported a same-store sales decline in September, down from 43 per cent of operators who reported negative sales in August.
Restaurant operators also reported a slight upturn in customer traffic levels in September.
Some 38 per cent of restaurant operators reported an increase in customer traffic between September 2009 and September 2010, while 37 per cent of operators reported a traffic decline.
In August, 35 per cent of operators reported an increase in customer traffic levels, while 42 per cent reported a traffic decline.
Despite the improvements in sales and traffic levels, restaurant operators reported a slight drop off in capital spending levels in recent months.
Some 42 percent of operators said they made a capital expenditure for equipment, expansion or remodelling during the last three months, down from 44 per cent of operators who reported similarly last month.
The Expectations Index, which measures restaurant operators’ six-month outlook for four industry indicators (same-store sales, employees, capital expenditures and business conditions), stood at 101.1 in September – up 1.0 per cent from August and its strongest level in five months.
Restaurant operators are more optimistic about an improving sales environment in the months ahead.
Some 43 per cent of restaurant operators expect to have higher sales in six months (compared to the same period in the previous year), up from 38 per cent who reported similarly last month.
In comparison, 14 per cent of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year, compared with 17 per cent who reported similarly last month.
Restaurant operators are also more bullish about the direction of the overall economy.
Some 38 per cent of restaurant operators said they expect economic conditions to improve in six months, up from 25 per cent last month and the strongest level of optimism in five months.
In comparison, just 16 per cent of operators said they expect economic conditions to worsen in the next six months, down from 21 per cent who reported similarly last month.
The RPI is based on the responses to the National Restaurant Association’s Restaurant Industry Tracking Survey, which is fielded monthly among restaurant operators nationwide on a variety of indicators including sales, traffic, labour, and capital expenditures.
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