Operators report higher same-store sales and traffic levels; outlook for sales and capital spending remains positive

The National Restaurant Association's Restaurant Performance Index (RPI) rose to 100.6 in June, up 0.8 percent from May's level of 99.9.In addition, June represented the sixth time in the last seven months that the RPI stood above 100, which signifies expansion in the index of key industry indicators.

Index values in excess of 100 indicate that key industry indicators are in a period of expansion, and index values less than 100 represent a period of contraction for key industry indicators.The RPI consists of two components, the Current Situation Index and the Expectations Index.

The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 100.5 in June – up 1.4 percent from May's level of 99.2.

Fifty-one percent of restaurant operators reported a same-store sales gain between June 2010 and June 2011, up from 39 percent of operators who reported higher same-store sales in May. Meanwhile, 31 percent of operators reported a same-store sales decline in June, down from 40 percent of operators who reported lower sales in May.

Forty-four percent of restaurant operators reported an increase in customer traffic between June 2010 and June 2011, up from 33 percent of operators who reported higher traffic in May. In comparison, 33 percent of operators reported a traffic decline in June, down from 41 percent who reported lower traffic in May.

Forty-eight percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, up from 44 percent who reported similarly last month.

The Expectations Index, which measures restaurant operators' six-month outlook stood at 100.7 in June — up slightly from May's level of 100.6.

Restaurant operators remain generally optimistic about sales growth in the months ahead, with 44 percent projecting higher sales in six months. In comparison, only 16 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.

In comparison, restaurant operators are somewhat less optimistic about the direction of the overall economy in the months ahead. Twenty-six percent of restaurant operators said they expect economic conditions to improve in six months, up slightly from 24 percent who reported similarly last month. Meanwhile, 20 percent of operators said they expect economic conditions to worsen in the next six months, compared to 21 percent last month.

Fifty percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, matching the proportion who reported similarly last month.