Thursday, November 1, 2012

Restaurant Performance Index Declined in ... - Hospitality Industry


Restaurant Performance Index Declined in September Due to Softer

Restaurant Performance Index Declined in September Due to Softer Sales, Traffic

Same-store sales rose for the 16th consecutive month; Restaurant operators are somewhat more optimistic about sales growth

WASHINGTON, Oct. 31, 2012 - As a result of softer same-store sales and customer traffic levels, the National Restaurant Association?sRestaurant Performance Index (RPI) declined in September.? The RPI - a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry - stood at 100.4 in September, down 0.3 percent from August.? Despite the decline, September represented the 11(th) consecutive month that the RPI stood above 100, which signifies continued expansion in the index of key industry indicators.

?Although restaurant operators reported softer same-store sales and customer traffic levels in September, they are somewhat more bullish about sales growth in the months ahead,? said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association.? ?Forty-five percent of restaurant operators expect their sales to improve in the next six months, while only 11 percent expect weaker sales.?

The RPI is constructed so that the health of the restaurant industry is measured in relation to a steady-state level of 100.? Index values above 100 indicate that key industry indicators are in a period of expansion, while index values below 100 represent a period of contraction for key industry indicators. The Index consists of two components - the Current Situation Index and the Expectations Index.?

The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 99.9 in September - down 0.7 percent from a level of 100.6 in August.? Although same-store sales remained positive in September, the softness in the labor and customer traffic indicators outweighed the performance, which led to a Current Situation Index reading below 100 for the second time in the last three months.?

Although restaurant operators reported positive same-store sales for the 16(th) consecutive month in September, results were much softer than recent months.? Forty-eight percent of restaurant operators reported a same-store sales gain between September 2011 and September 2012, down from 61 percent in August and the level proportion in 11 months.? In comparison, 35 percent of operators reported lower same-store sales in September, up from 25 percent in August.?

While sales remained positive overall, restaurant operators reported a net decline in customer traffic levels in September.? Thirty-six percent of restaurant operators reported higher customer traffic levels between September 2011 and September 2012, down from 47 percent who reported positive traffic in August.? Meanwhile, 41 percent of operators reported lower customer traffic levels in September, up from 32 percent in August.

Despite the softer sales and traffic results, restaurant operators reported an uptick in capital spending activity.? Forty-nine percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, up from 41 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 100.9 in September - up 0.2 percent from August.? Although August marked the 13(th) consecutive month that the Expectations Index stood above 100, it remains below the stronger levels reached during the first half of 2012.? ?

Restaurant operators are somewhat more optimistic that their sales levels will improve in the months ahead.? Forty-five percent of restaurant operators expect to have higher sales in six months (compared to the same period in the previous year), up from 40 percent last month and the strongest level in three months.? Meanwhile, only 11 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, essentially unchanged from 12 percent last month.

In contrast to their generally positive outlook for sales, restaurant operators are more uncertain about the direction of the overall economy.? Only 26 percent of restaurant operators said they expect economic conditions to improve in six months, down slightly from 29 percent last month.? Meanwhile, 18 percent of operators said they expect economic conditions to worsen in the next six months, while 56 percent think conditions will stay about the same.?

Restaurant operators? outlook for capital spending remained steady.? Forty-four percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, unchanged from last month.?

The RPI is based on the responses to the National Restaurant Association?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 full report is available online.

The RPI is released on the last business day of each month, and more detailed data and analysis can be found on Restaurant TrendMapper (http://www.restaurant.org/trendmapper), the Association?s subscription-based service that provides detailed analysis of restaurant industry trends.

Founded in 1919, the National Restaurant Association is the leading business association for the restaurant industry, which comprises 970,000 restaurant and foodservice outlets and a workforce of nearly 13 million employees. We represent the industry in Washington, D.C., and advocate on its behalf. We operate the industry?s largest trade show (NRA Show May 18-21, 2013, in Chicago); leading food safety training and certification program (ServSafe); unique career-building high school program (the NRAEF?s ProStart, including the National ProStart Invitational April 19-21, 2013, in Baltimore, Md.); as well as the Kids LiveWell program promoting healthful kids? menu options. For more information, visit http://www.restaurant.org and find us on Twitter @WeRRestaurants, Facebook and YouTube.

SOURCE National Restaurant Association

National Restaurant Association

CONTACT: Annika Stensson, +1-202-973-3677, .(JavaScript must be enabled to view this email address); or Rachel Salabes, +1-202-331-5997, .(JavaScript must be enabled to view this email address)

Web Site: http://www.restaurant.org/


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Posted on Oct 31, 2012 - 04:00 PM ? Print

Source: http://www.hospitality-industry.com/index.php/news/comments/restaurant_performance_index_declined_in_september_due_to_softer/

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