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NRA RPI Jumps to 101.1 in December

The NRA's Restaurant Performance Index posted a solid 1.1 percent increase in December, indicating a positive outlook among foodservice operators based on improving business conditions.

 

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 101.0 in December, up a solid 1.1 percent from its November level. In addition, December marked the third time in the last four months that the RPI stood at more than 100, which signifies expansion in the index of key industry indicators. The NRA attributes these gains to expanding same-store sales and customer traffic levels as well as growing optimism among restaurant operators.

 

The Current Situation Index, which measures trends in same-store sales, traffic, labor and capital expenditures stood at 99.7 in December, a 1.0 percent increase from November. Softness in the labor and capital expenditure indicators outweighed the stronger same-store sales and customer traffic performances, thus keeping this index at less than 100.

In addition, 48 percent of operators reported a net increase in same store sales when comparing December 2010 to December 2009. This represents an eight percent increase when compared to November's performance levels. In comparison, 35 percent of operators reported a same-store sales decline in December, down from 44 percent of operators who reported negative sales in November.

Forty-three percent of restaurant operators reported an increase in customer traffic between December 2009 and December 2010, up from 36 percent of operators who reported higher traffic in November. In comparison, 34 percent of operators reported a traffic decline in December, down from 45 percent in November.

Restaurant operators reported relatively steady levels of capital spending activity in recent months. Forty-one percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, roughly on par with the levels reported in the previous three monthly surveys.

The Expectations Index, which measures restaurant operators' six-month outlook for same-store sales, employees, capital expenditures and business conditions stood at 102.4 in December – up 1.2 percent from November and its highest level since March 2007, according to the NRA.

Fifty-five percent of restaurant operators expect to have higher sales in six months (compared to the same period in the previous year), up from 42 percent last month. Meanwhile, only eight percent of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year, down from 14 percent who reported similarly last month.

Restaurant operators' plans for capital spending rose to its highest level in nearly three years, according to the NRA. Fifty percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, up from 47 percent who reported similarly last month.

For the third consecutive month, restaurant operators reported a positive outlook for staffing gains in the months ahead. Twenty-three percent of operators expect to increase staffing levels in six months (compared with the same period in the previous year), while just 11 percent plan to reduce staffing levels in six months.

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