Most Restaurants Operators Plan Capital Expenditures for Commercial Appliances/Remodeling in Next 6 Months
Dec 31, 2013
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U.S. restaurant operators continued to report positive capital spending levels in November 2013, with 54% reporting that they made a capital expenditure for commercial appliances and other equipment, expansion, or remodeling in the last three months, according to the latest National Restaurant Association’s Restaurant Performance Index (RPI). It was the seventh month in which most operators reported making capital expenditures.

The restaurant industry reported improving same-store sales and customer traffic levels in November, which helped boost the RPI composite index to 101.2, up 0.3% from October and the best level for the index since June 2013. It was the ninth consecutive month with an RPI above 100, indicating expansion in the industry indicators.

Although operators' six-month outlook on the economy includes some uncertainty, most restaurant operators are still planning for capital expenditures in that time-frame. 55% of restaurant operators plan to buy commercial appliances/foodservice equipment or make some other capital expenditure in the next six months. This level is up from 53% in the previous month's report.

One component of the RPI is the Current Situation Index, looking at current trends in four indicators: same-store sales, traffic, labor, and capital expenditures. This index was at 101.2 in November, up 0.3% from 100.9 in October and the highest level in six months. This index has been above 100 for seven of the last eight months, indicating expansion in indicators.

Another components of the RPI is the Expectations Index, looking at operators’ six-month outlook for four indicators: same-store sales, employees, capital expenditures, and business conditions. This index was at 101.1 in November, up 0.2% from October, and marking the 13th consecutive month in which this index was above 100.

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