WASHINGTONThe National Restaurant Associations Restaurant Performance Index (RPI) hit a 5-month high in November thanks to improving same-store sales and customer traffic levels. The RPI hit 101.2 in November, up 0.3% from October and the strongest level since June 2013.
November also represented the ninth straight month of the RPI topping the 100 level, which signifies expansion in the index of key industry indicators.
"Recent growth in the RPI was fueled in large part by improving same-store sales and customer traffic levels," said Hudson Riehle, senior vice president of the Research and Knowledge Group for the National Restaurant Association. "In addition, restaurant operators are somewhat more confident that sales levels will improve, 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 Index stood at 101.2 in November, up 0.3% from a level of 100.9 in October and the highest level in six months. Aside from September's downtick, the Current Situation Index remained above 100 in seven of the last eight months.
The Expectations Index stood at 101.1 in November, up 0.2% from a level of 100.9 in October. In addition, November represented the thirteen consecutive month in which the Expectations Index stood above 100.
A majority of restaurant operators reported higher same-store sales for the second consecutive month in November. Fifty-seven percent of restaurant operators reported a same-store sales gain between November 2012 and November 2013, up from 54% in October and the highest level in six months. In comparison, 29% of operators reported a decline in same-store sales in November, compared to 30% in October.
Restaurant operators also reported improving customer traffic levels in November. Forty-seven percent of restaurant operators reported customer traffic growth between November 2012 and November 2013, up from 43% who reported a traffic gain in October. In comparison, 35% of operators reported a decline in customer traffic in November, down from 39% in October.
Along with higher sales and customer traffic, restaurant operators continued to report positive capital spending levels. Fifty-four percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, the seventh consecutive month in which a majority of operators reported making expenditures.
Restaurant operators are generally positive about sales expectations in the months ahead. Thirty-eight percent of restaurant operators expect to have higher sales in six months (compared to the same period in the previous year), up slightly from 36% who reported similarly last month. Meanwhile, only 9% of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year, while 53% expect their sales to remain about the same.
In comparison, restaurant operators are less optimistic about the direction of the economy. Twenty-four percent of restaurant operators said they expect economic conditions to improve in six months, while 19% expect the economy to worsen. The remaining 57% expect the economy to continue trending sideways during the next six months.
Despite an uncertain economic outlook, a majority of restaurant operators are planning for capital expenditures in the coming months. Fifty-five percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, up slightly from 53 percent who reported similarly last month.
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