With steadily positive sales and traffic results, restaurant operators reported an uptick in capital spending activity in February 2012, according to the National Restaurant Association's Restaurant Performance Index (RPI). 47% of restaurant operators said they made a capital expenditure for equipment, expansion, or remodeling during the last three months, up from 42% who reported similarly last month.
Along with a positive outlook for sales and staffing levels, the report also sees good future capital spending by restaurant operators. 49% of restaurant operators plan to make a capital expenditure for equipment, expansion, or remodeling in the next six months, essentially unchanged from the January report.
The overall index, the RPI, remained above 100 for the fourth consecutive month in February 2012. The RPI - a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry - was 101.9 in February, up 0.6% from January 101.3. The association said the RPI was solidly above the 100 threshold signifying expansion in the index of key industry indicators.
"In addition, restaurant operators are bullish about sales growth in the months ahead, while their outlook for the economy remains cautiously optimistic." said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. "Perhaps the most positive indicator is the optimistic outlook for staffing levels in the months ahead. Only 7% of restaurant operators expect to reduce staffing levels in the next six months, the lowest level in nearly eight years."
The Current Situation Index measures current trends in four industry indicators: same-store sales, traffic, labor, and capital expenditures. The index was 101.9 in February, up 1.3% from January 100.6. The index was above 100 for the fourth consecutive month, which signifies expansion in the current situation indicators.
The Expectations Index measures restaurant operators' six-month outlook for four industry indicators: same-store sales, employees, capital expenditures , and business conditions. The index was 102.0 in February, essentially unchanged from January's 102.1. February was the sixth consecutive month that the index was above 100, which represents an optimistic outlook among restaurant operators for business conditions in the months ahead.
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