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Driven by improving same-store sales and customer traffic levels, as well as growing optimism among restaurant operators, the outlook for the restaurant industry improved in September. 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 100.3 in September, up a solid 0.8 percent from its August level. In addition, the RPI rose above 100 for the first time in five months, signifying expansion in the index of key industry indicators.
“The RPI’s solid gain in September was the result of broad-based improvements among both the current situation and forward-looking indicators,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the National Restaurant Association. “Restaurant operators reported positive same-store sales and customer traffic levels for the first time in six months, which propelled the RPI’s Current Situation Index to its highest level in nearly three years.
“In addition, restaurant operators are more optimistic about sales growth in the months ahead, while their outlook for the economy rose to its strongest level in five months.”
The Current Situation Index measures current trends in four industry indicators -- same-store sales, traffic, labor and capital expenditures -- and stood at 99.4 in September, up 0.5 percent from August and its strongest level since October 2007. However, the index remained below 100 for the 37th consecutive month, as the softness in the labor and capital expenditure indicators outweighed the gains in same-store sales and customer traffic.
Restaurant operators reported a net increase in same-store sales for the first time in six months in September.
Restaurant operators also reported a slight uptick in customer traffic levels in September.
Despite the improvements in sales and traffic levels, restaurant operators reported a slight dropoff in capital spending levels in recent months.
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 101.1 in September – up 1.0 percent from August and its strongest level in five months.
Restaurant operators are more optimistic about an improving sales environment in the months ahead
Restaurant operators are also more bullish about the direction of the overall economy.
Along with an improving outlook for sales and the economy, restaurant operators’ plans for capital expenditures also grew. Forty-seven percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, up from 42 percent who reported similarly last month and the strongest level in five months.