NRA: Dec. Restaurant Performance Index highest in 6 months

 
Jan. 30, 2006

WASHINGTON, D.C. — The outlook for the restaurant industry grew increasingly optimistic in December as the National Restaurant Association's comprehensive index of restaurant activity registered a solid gain.

According to a news release, NRA's Restaurant Performance Index — a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry — stood at 102 in December, up 0.5 percent from November and the strongest level in six months. December also represented the 32nd consecutive month above 100, which represents expansion in the Association's composite index of eight key industry indicators.

"Fueled by strong same-store sales, December's solid index performance was the result of broad-based growth across the index components," said Hudson Riehle, NRA senior vice president of Research and Information Services. "Three out of five restaurant operators reported a same-store sales gain in December — the strongest level in 12 months. In addition, the Expectations Index posted its fourth consecutive monthly increase, which points toward growth in sales, staffing levels and capital expenditures during the next several months."

The Restaurant Performance Index is based on the responses to the NRA'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.

The December increase in the Restaurant Performance Index was driven by gains in both the current situation and expectations components of the index. The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 101.1 in December — up a solid 0.7 percent from its November level.

Growth in the Current Situation Index was driven by a solid same-store sales performance in December. Sixty percent of restaurant operators reported a same-store sales gain between December 2004 and December 2005 — up from 51 percent of operators who registered a sales gain in November. Twenty-five percent of operators reported a same-store sales decline between December 2004 and December 2005, while 15 percent of operators reported no change in sales.

A growing proportion of restaurant operators are optimistic about sales growth in the coming months. Fifty-eight percent expect sales volume in six months to be higher than in the same period in the previous year, up from 52 percent last month. In contrast, just 9 percent of restaurant operators expect their sales in six months to be lower.


Topics: NAPICS


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