U.S. Restaurant Performance Index at 3-Year High
Dec 1, 2010
 Print this page

The National Restaurant Association's Restaurant Performance Index (RPI) rose to its highest level in three years in October, with current capital spending for equipment, expansion, or remodeling holding steady and almost half of operators expecting to make capital expenditures in the next six months.

The RPI was 100.7 in October, up 0.4% from September and the strongest level since September 2007. In addition, the RPI stood above 100 for the second consecutive month, which signifies expansion in the index of key industry indicators.

“October’s RPI gain was driven by continued improvements in the same-store sales and customer traffic indicators,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the National Restaurant Association. “In addition…restaurant operators are increasingly optimistic about sales growth in the coming months, and also reported a positive outlook for staffing levels for the first time in six months."

The RPI's Current Situation Index (measuring current same-store sales, traffic, labor, and capital expenditures) was at 100.0 in October – up 0.6%. it was the first time the Current Situation Index reached the 100 level since August 2007.

Capital spending activity remained relatively steady. 42% of operators said they made a capital expenditure for equipment, expansion, or remodeling during the past three months, matching the proportion of operators who reported similarly last month.

The RPI's Expectations Index (measuring restaurant operators’ six-month outlook for same-store sales, employees, capital expenditures, and business conditions) stood at 101.4 in October – up 0.3% from September and its strongest level in six months. The association said restaurant operators remain optimistic about sales growth in the months ahead. 43% of restaurant operators expect to have higher sales in six months (compared with the same period in the previous year), matching the proportion who reported similarly last month. Meanwhile, just 12% of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year, down slightly from 14% who reported similarly last month.

Restaurant operators also remain relatively optimistic about the direction of the overall economy. 35% of restaurant operators said they expect economic conditions to improve in six months, down slightly from 38% last month. In comparison, only 12% of operators said they expect economic conditions to worsen in the next six months, down from 16% who reported similarly last month.

Restaurant operators’ plans for capital expenditures also remained solid, with 48% of restaurant operators planning to make a capital expenditure for equipment, expansion or remodeling in the next six months, up slightly from 47% who reported similarly last month and the strongest level in six months.

(RPI values greater than 100 equate to expansion in the industry; values less than 100 equate to contraction.)

Back to Breaking News