Restaurant Capital Spending Up Even on Softened Outlook
Jul 1, 2010
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Even as outlook for the U.S. restaurant industry softened in May, with the National Restaurant Association’s index of restaurant activity moving below 100 for the first time in three months, capital expenditure activity rose to its highest level in almost 2 years.
The Restaurant Performance Index (RPI), a monthly composite index tracking the health and outlook for the U.S. restaurant industry, was 99.7 in May, down 0.7% from April’s 100.4. The RPI’s May drop came after strong index growth earlier this year and amid sharply increasing wholesale food prices.
An overall index values above 100 indicate that key industry indicators are in a period of expansion and below 100 represent indicators are in contraction.
45% of operators said they made a capital expenditure for equipment, expansion, or remodeling in the last three months, up from 40% in April and the highest level in nearly two years.
Hudson Riehle, senior vice president of the Research and Knowledge Group for the association, said capital expenditures activity and a continued positive sales outlook indicates that restaurant operators are optimistic that the coming months will show improved business conditions.
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