Restaurant Performance Hits 14-Month High

WASHINGTONThe National Restaurant Associations Restaurant Performance Index (RPI) hit a 14-month high in May due to strong same-store sales and customer traffic levels. RPI hit 101.8 in May, up 0.9% from April, making it the third consecutive monthly gain.

May also represented a third straight month of the RPI topping the 100 level, which signifies expansion in the index of key industry indicators. In March 2013, RPI rose 0.7% to 100.6 from its February level of 99.9.

 The May increase in the Restaurant Performance Index was driven by broad-based gains in the current situation indicators, most notably positive same-store sales and customer traffic results," said Hudson Riehle, senior vice president of the research and knowledge group for the National Restaurant Association. In addition, restaurant operators remain optimistic about continued sales growth and a majority plan to make a capital expenditure in the next six months."

The RPI consists of two components, the Current Situation Index (measuring current trends) and the Expectations Index (measuring restaurant operators' six-month outlook), and it tracks the health and outlook for the U.S. restaurant industry.

The Current Situation stood at 101.6 in May, which is up 1.6% from 100.1 in April. May represented the strongest Current Situation Index reading since March 2012. A majority of restaurant operators reported higher same-store sales in May, and the overall results showed a solid improvement over the April performance. Restaurant operators also reported a net gain in customer traffic levels in May.

The Expectations Index stood at 102 in May, which is the strongest level in 12 months. Each of the four expectations indicators stood above 100 for the fifth consecutive month, which indicates broad-based optimism for business conditions in the coming months. Restaurant operators are increasingly optimistic about their sales prospects in the months ahead, but they are not quite as bullish about the direction of the overall economy.

Restaurant operators continue to plan for capital spending in the months ahead, with 57% planning to make a capital expenditure for equipment, expansion or remodeling in the next six months. Last month, about 59% of operators made similar reports. In addition, restaurant operators are generally positive on the staffing front in the coming months, with 21% planning to increase staffing levels in six months (compared to the same period in the previous year), while just 8% said they plan to cut positions.

Along with the positive sales and traffic results, restaurant operators reported an increase in capital spending activity. About 52% said they made a capital expenditure for equipment, expansion or remodeling during the last three months, which is up from 47% who reported similarly last month.

For information on upcoming food trends in the restaurant scene, view the Food Product Design image gallery "2013 Restaurant Trend Predictions."