Restaurant Industry Outlook Stands Strong
Buoyed by positive same-store sales and solid optimism among restaurant operators for continued growth, the outlook for the restaurant industry remained positive in April.
“The restaurant industry continued to build momentum in April, with restaurant operators reporting positive same-store sales and customer traffic levels for the sixth time in the last eight months,” says Hudson Riehle, senior vice president of the research and knowledge group for the NRA. “Barring any significant external shocks, restaurant sales and traffic levels will continue to improve in the months ahead.”
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, and index values below 100 represent a period of contraction for key industry indicators. The RPI consists of two components, the Current Situation Index and the Expectations Index.
Restaurant operators continued to report net positive same-store sales results in April. Fifty percent of restaurant operators reported a same-store sales gain between April 2010 and April 2011, down slightly from 52 percent of operators who reported higher same-store sales in March. In comparison, 31 percent of operators reported a same-store sales decline in April, matching the proportion of operators who reported lower sales in March.
Restaurant operators reported a slight dropoff in plans for capital spending in the months ahead. Forty-nine percent of restaurant operators plan to make a capital expenditure for equipment, expansion, or remodeling in the next six months, down slightly from 53 percent who reported similarly last month.
For the seventh consecutive month, restaurant operators reported a positive outlook for staffing levels in the coming months. Twenty-four percent of restaurant operators plan to increase staffing levels in six months (compared to the same period in the previous year), while just 11 percent said they expect to reduce staffing levels in six months.
The RPI is based on the responses to the NRA’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 and a video summary are 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 (www.restaurant.org/trendmapper), the Association's subscription-based service that provides detailed analysis of restaurant industry trends.