Restaurant traffic slips in June, same-store sales continue to rise

 
Aug. 1, 2014

The National Restaurant Association’s monthly Restaurant Performance Index reported a moderate decline in June, driven largely by softer traffic. The RPI was 101.3 in June, down from a level of 102.1 in May and the first decline in four months. Despite the drop, the RPI remained above 100 for the 16th consecutive month.

“Although overall same-store sales remained positive in June, the RPI dipped as a result of softer customer traffic levels,” NRA SVP Hudson Riehle said in a news release. “Looking forward, restaurant operators are generally optimistic about sales growth in the months ahead, and their outlook for capital spending remains near post-recession highs.”

Current Situation Index

The Current Situation Index, which measures same-store sales, traffic, labor and capital expenditures, stood at 100.9 in June – down 1.1 percent from May and the first decline in four months.

However, for the fourth consecutive month, a majority of restaurant operators reported higher same-store sales. Fifty-five percent reported a same-store sales gain between June 2013 and June 2014, down from 65 percent who reported similarly in May. In comparison, 27 percent of operators reported a same-store sales decline in June, up from 19 percent who reported similarly in May.   

Respondents also reported softer customer traffic results in June. Thirty-nine percent reported an increase in customer traffic levels between June 2013 and June 2014, down from 47 percent who reported higher traffic in May. Meanwhile, 41 percent said their customer traffic declined in June, up from 29 percent who reported similarly in May.

Although sales and customer traffic levels softened somewhat in June, capital spending activity remained solid: 53 percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, matching the proportion who reported similarly last month.

Expectations Index

The Expectations Index stood at 101.7 in June – down from levels of 102.2 in both April and May. However, June represented the 20th consecutive month in which the Expectations Index stood above 100.

Operators remain generally optimistic about sales growth in the months ahead, with 44 percent expecting to have higher sales in six months (compared to the same period in the previous year), down from 50 percent who reported similarly last month. In comparison, only 10 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, up slightly from 8 percent last month.

Respondents are somewhat less bullish about the overall economy. Twenty-seven percent said they expect economic conditions to improve in six months, while 18 percent expect the economy to worsen. The remaining 55 percent expect economic conditions in six months to be about the same as they are now. 

For the 10th consecutive month, a majority of restaurant operators are planning for capital expenditures in the coming months: 59 percent plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, down slightly from 62 percent who reported similarly last month.


Topics: Franchising & Growth , National Restaurant Association , Operations Management , Trends / Statistics


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