The National Restaurant Association’s Restaurant Performance Index increased 1.8% in October, rebounding from a decline of 0.9% in September. The R.P.I. was above 100 for the 20th consecutive month.
“The positive same-store sales and customer traffic results suggest that restaurants are the beneficiaries of falling gas prices, which were down 88c since the end of June,” said Hudson Riehle, senior vice-president of the Research and Knowledge Group for the N.R.A. “Elevated food costs continue to top the list of challenges reported by restaurant operators, but overall they remain generally optimistic that business conditions will improve in the months ahead.”
The R.P.I. features two components: the current situation index (C.S.I.) and the expectations index (E.I.). The October E.I. rose 1.6% from September. Fifty-two per cent of restaurant operators said they expect to have higher sales in six months (compared to the same period in the previous year), up from 40% who reported similarly last month. Meanwhile, only 6% of restaurant operators said they expect their sales volume in six months to be lower than it was during the same period in the previous year, down from 8% last month.
Restaurant operators are also somewhat more optimistic about the direction of the economy. Thirty-five per cent of restaurant operators said they expect economic conditions to improve in six months, up from 20% in September and the highest level in more than two years. Only 8% said they expect economic conditions to worsen in six months, while the remaining 57% expect economic conditions in six months to be about the same as they are now.
The C.S.I. rose 2.1% in October to 103.1. A majority of restaurant operators reported higher same-store sales for the eighth consecutive month. Seventy-one per cent reported a same-store sales gain between October 2013 and October 2014, up from the 63% who reported higher sales in August.
Only 11% of operators reported a same-store sales decline in October, down from 23% in September.
Restaurant operators reported stronger customer traffic results in October. Fifty-five per cent of restaurant operators reported an increase in customer traffic between October 2013 and October 2014, up from 40% who reported higher traffic in September. In contrast, only 16% of operators said their traffic declined in October, down from 33% who reported similarly in September.
Along with stronger sales and traffic results, restaurant operators reported an increase in capital spending activity. Fifty-seven per cent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, up from 49% who reported similarly last month.
The R.P.I. is based on the responses to the N.R.A.’s Restaurant Industry Tracking Survey, which is fielded monthly among restaurant operators nationwide on a variety of indicators including sales, traffic, labor and capital expenditures.