Buoyed by positive same-store sales and solid optimism among restaurant operators for continued growth, the outlook for the restaurant industry remained positive in April.  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 100.9 in April, essentially unchanged from a level of 101.0 in March.  Additionally, April represented the fifth consecutive month in which the RPI stood above 100, which signifies expansion in the index of key industry indicators.

“The restaurant industry continued to build momentum in April, with restaurant operators reporting positive same-store sales and customer traffic levels for the sixth time in the last eight months,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association.  “Barring any significant external shocks, restaurant sales and traffic levels will continue to improve in the months ahead.”

The Current Situation Index, which measures current trends in four industry indicators -- same-store sales, traffic, labor and capital expenditures -- stood at 100.3 in April, up slightly from a March level of 100.2.  In addition, the Current Situation Index stood above 100 for the second consecutive month, which signifies expansion in the current situation indicators.

Restaurant operators continued to report net positive same-store sales results in April. 

Fifty percent of restaurant operators reported a same-store sales gain between April 2010 and April 2011. In comparison, 31 percent of operators reported a same-store sales decline in April, matching the proportion of operators who reported lower sales in March.

Restaurant operators also reported a net increase in customer traffic in April, although levels were somewhat softer than the March results. Thirty-eight percent of restaurant operators reported an increase in customer traffic between April 2010 and April 2011. In comparison, 35 percent of operators reported a traffic decline in April, up from 32 percent in March.

Capital spending activity among restaurant operators trended upward in recent months. Forty-eight percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, the highest level in nearly three years.

Operators' six-month outlook

The Expectations Index, which measures restaurant operators’ six-month outlook for same-store sales, employees, capital expenditures and business conditions, stood at 101.5 in April – down slightly from a level of 101.7 in March.  Despite the decline, the Expectations Index stood above the 100 level for the ninth consecutive month, which signifies expansion in the forward-looking indicators.

Restaurant operators remain bullish about sales growth in the months ahead. Forty-seven percent of restaurant operators expect to have higher sales in six months (compared to the same period in the previous year), down slightly from 50 percent who reported similarly last month. In comparison, just 13 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, matching the proportion who reported similarly last month.

While restaurant operators’ sales outlook remains positive, they aren’t quite as optimistic about the direction of the overall economy in the coming months. Thirty-three percent of restaurant operators said they expect economic conditions to improve in six months, up slightly from 32 percent who reported similarly last month. In comparison, 17 percent of operators said they expect economic conditions to worsen in the next six months, compared to 19 percent who reported similarly last month. 

Restaurant operators reported a slight drop-off in plans for capital spending in the months ahead. Forty-nine percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, down slightly from 53 percent who reported similarly last month. 

For the seventh consecutive month, restaurant operators reported a positive outlook for staffing levels in the coming months. Twenty-four percent of restaurant operators plan to increase staffing levels in six months, while just 11 percent said they expect to reduce staffing levels in six months. 

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, labor and capital expenditures.

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User Comments – Give us your opinion!
  • Brandon Gerson
    90056239
    Expect restaurant sales to continue to increase as the economy picks up. Current foodservice industry statistics indicate sales growth over the next six months.

    Check out CHD Expert for restaurant sales trends, a restaurant database or any restaurant industry statistics: http://chd-expert.com/
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