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Bolstered by positive same-store sales and traffic results and an optimistic outlook among restaurant operators, the National Restaurant Association's Restaurant Performance Index (RPI) remained above 100 for the fourth consecutive month in February.
The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 101.9 in February, up 0.6 percent from January's level of 101.3.
"Buoyed by continued gains in national employment and an extra day in February as a result of Leap Year, a solid majority of restaurant operators reported positive same-store sales and traffic results," said Hudson Riehle, senior vice president of the Research and Knowledge Group for the NRA. "In addition, operators are bullish about sales growth in the months ahead, while their outlook for the economy remains cautiously optimistic."
He added that only 7 percent of operators expect to reduce staffing levels in the next six months, which is the lowest level in nearly eight years.
Current Situation Index
The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 101.9 in February – up 1.3 percent from January's level of 100.6.
Restaurant operators reported positive same-store sales for the ninth consecutive month in February, aided by an extra day in February. Sixty-three percent of restaurant operators reported a same-store sales gain between February 2011 and February 2012, up from 56 percent who reported a sales gain in January. In comparison, just 18 percent of operators reported lower same-store sales in February, down from 26 percent who reported similarly in January.
Fifty-five percent of restaurant operators reported higher customer traffic levels between February 2011 and February 2012, while just 19 percent reported a traffic decline. In January, 46 percent of operators reported higher customer traffic, while 30 percent reported a traffic decline.
Additionally, operators reported an uptick in capital spending activity. Forty-seven percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, up from 42 percent who reported similarly last month.
The Expectations Index, which measures restaurant operators' six-month outlook for four industry indicators (same-store sales, employees, capital expenditures and business conditions), stood at 102.0 in February – essentially unchanged from January's level of 102.1.
For the third consecutive month, a majority of restaurant operators expect their sales to be higher in the coming months. Fifty-three percent of restaurant operators expect to have higher sales in six months (compared to the same period in the previous year), matching the proportion who reported similarly last month. In comparison, only nine percent expect their sales volume in six months to be lower than it was during the same period in the previous year, up slightly from seven percent who reported similarly last month.
Operators are also generally optimistic about the direction of the overall economy. Thirty-five percent said they expect economic conditions to improve in six months, down slightly from 37 percent last month. In comparison, 14 percent said they expect economic conditions to worsen in the next six months, up slightly from 11 percent who reported similarly last month.
For the fifth consecutive month, restaurant operators reported higher expectations for staffing levels in the months ahead. Twenty-four percent of restaurant operators plan to increase staffing levels in six months (compared to the same period in the previous year), while just seven percent said they expect to reduce staffing levels in six months.
Additionally, 49 percent of operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, essentially unchanged from the proportion reporting similarly last month.
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