Restaurant Capital Spending Shrinks In October, But Increase Expected in Next 6 Months Dec 3, 2012

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Restaurant operators' had a dampened outlook for sales growth and the economy in November, according to the National Restaurant Association's Restaurant Performance Index (RPI).

Capital spending was down slightly in October, with 46% of operators reporting a capital expenditure for equipment, expansion, or remodeling in the last three months. In September the level was 49%.

However, restaurant operators' six-month outlook includes increased planning for capital spending: 50%, up from 44% who said so in the September 2012.

The monthly composite index tracking the U.S. restaurant industry overall was down 0.9% from September to 99.5 in October. It was the first time in 14 months with an RPI below 100, signifying contraction in the index of key industry indicators.

"Although restaurant operators overall continued to report positive same-store sales in October, their short-term outlook for sales growth and the economy is decidedly more pessimistic," said Hudson Riehle, senior vice president of the association's Research and Knowledge Group. "Nearly two out of five restaurant operators expect business conditions to worsen in the next six months, which is double the proportion that expect conditions to improve."

The RPI consists of two components: the Current Situation Index and the Expectations Index.

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