Restaurant operators remain optimistic
While the National Restaurant Association’s Restaurant Performance Index (RPI) declined slightly during the month of June, the RPI’s expectations index remained buoyant. For the month of June the overall RPI declined to 100.7 from 101.6 in May while the expectations index held steady at 102.
“Although the overall RPI dipped somewhat in June, it remained in positive territory as restaurant operators continued to report gains in both sales and customer traffic,” says Hudson Riehle, senior vice-president of the NRA’s Research and Knowledge Group. “Looking forward, restaurant operators remain generally optimistic about the business environment in the months ahead, with the expectations index holding steady at a 12-month high.”
The RPI is comprised of two indexes – the expectation index and the current situation index. The current situation index, which measures same-store sales, traffic, labor and capital expenditures, was 100.7 in June, down from 101.6 in May.
Although a majority of restaurant operators reported higher same-store sales in June, the results were somewhat softer than the solid May results. Fifty-two per cent of restaurant operators reported a same-store sales gain between June 2012 and June 2013, down from 63% who reported higher sales in May. In comparison, 34% of operators reported a decline in same-store sales in June, up from 23% in May.
Restaurant operators also reported softer traffic results in June. Forty-three per cent of restaurant operators reported higher customer traffic levels between June 2012 and June 2013, while 39% of operators said their traffic declined. In May, 47% of operators reported an increase in customer traffic, while 30% reported lower traffic levels.
The expectations index measures restaurant operators’ six-month outlook for same-store sales, employees, business conditions and capital expenditures. Operators are generally optimistic about sales growth in the months ahead, with 46% saying they expect to have higher sales in six months compared to the same period in the previous year, essentially unchanged from the 47% who reported similarly last month. Only 11% 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 to 8% last month.
Restaurant operators remain somewhat less bullish about overall economic conditions. Thirty per cent say they expect economic conditions to improve in six months, a proportion that has remained essentially unchanged during the last six months. Sixteen per cent say they expect economic conditions to worsen in the next six months, up slightly from 15% last month.