Restaurant Equipment Buying Plans Remain Strong
May 31, 2012
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The outlook for the restaurant industry remained positive for the coming months with the National Restaurant Association's Restaurant Performance Index (RPI) standing well above 100 in April. The April RPI of 101.6 was down 0.6% from the strong level of 102.2 in March. April was the sixth consecutive month with an RPI above 100, which signifies expansion in the index of key industry indicators.
"Although the Restaurant Performance Index dipped somewhat in April, it remained solidly in positive territory," said Hudson Riehle, senior vice president of the Research and Knowledge Group for the association. "Restaurant operators reported positive same-store sales for the 11th consecutive month, and a majority of them expect business to continue to improve in the months ahead."
Index values above 100 indicate that key industry indicators are in a period of expansion, while index values below 100 indicate contraction.
The Current Situation Index measures current trends in four industry indicators: same-store sales, traffic, labor, and capital expenditures.
The Current Situation Index was 101.0 in April, down 1.0% from a level of 102.0 in March. The index was above 100 for the sixth consecutive month, indicating expansion in current situation indicators.
Restaurant operators reported somewhat lower capital spending levels. 44% of operators said they made a capital expenditure for equipment, expansion or remodeling in the last three months, down from 48% who reported similarly in the previous month's report.
The Expectations Index measures restaurant operators' six-month outlook for four industry indicators: same-store sales, employees, capital expenditures, and business conditions. This index was at 102.2 in April - down slightly from a 15-month high of 102.4 in March. April also represented the eighth consecutive month that the Expectations Index stood above 100, indicating a positive outlook among restaurant operators for business conditions in the coming months.
Restaurant operators also continue to plan for capital spending in the months ahead. 52% of restaurant operators plan to make a capital expenditure for equipment, expansion, or remodeling in the next six months, down slightly from 56% who reported similarly in the previous month's report.
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