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Restaurant index sees modest Aug. increase
September 30, 2007
WASHINGTON, D.C. — The outlook for the restaurant industry remained positive in August, as the National Restaurant Association's comprehensive index of restaurant activity registered a modest gain.
The Association's Restaurant Performance Index — a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry — stood at 101.1 in August, up 0.2 percent from its July level.Additionally, the RPI remained above 100 for the 52nd consecutive month.
The index is based on the responses to the NRA's Restaurant Industry Tracking Survey, fielded monthly among restaurant operators on indicators that include sales, traffic, labor and capital expenditures. The index consists of the Current Situation Index and the Expectations Index.
The Current Situation Index measures current trends in four industry indicators — same-store sales, traffic, labor and capital expenditures — and stood at 101.2 in August, up 0.7 percent from July and its strongest level since December 2006.
Findings include:
- Fifty-four percent of restaurant operators reported a same-store sales gain between August 2006 and August 2007, up from 48 percent who reported a sales gain in July.
- Twenty-nine percent of operators reported a same-store sales decline in August, down from 36 percent who reported similarly in July.
- Forty-four percent of restaurant operators reported an increase in customer traffic between August 2006 and August 2007, up from 38 percent who reported similarly in June.
- Thirty-two percent of operators reported a traffic decline in August, while 24 percent said their customer-traffic levels were about the same as they were in August 2006.
In addition to the stronger sales and traffic results, capital expenditure activity was stronger in August. Fifty-eight percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, the strongest level in nearly three years.
Expectation Index
The Expectations Index measures restaurant operators' six-month outlook for four industry indicators — same-store sales, employees, capital expenditures and business conditions — and stood at 100.9 in August — down 0.3 percent from July and its lowest level in a year.
Findings include:
- Forty-four percent of restaurant operators expect to have higher sales in six months, down from 49 percent who reported similarly last month.
- Nineteen percent expect their sales volume in six months to be lower than it was during the same period last year.
- Twenty-four percent of operators expect economic conditions to improve in six months, down from 26 percent who reported similarly last month and the lowest level in the five-year history of the Restaurant Performance Index.
- Twenty-seven percent of operators said they expect economic conditions to worsen in six months, while 49 percent expect economic conditions to remain about the same.
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