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Operators remain optimistic on sales, traffic growth

Operators remain optimistic on sales, traffic growth

Outlook somewhat steady despite June decline in NRA Restaurant Performance Index

Restaurateurs remained optimistic in June about sales and traffic growth in the coming months despite a decline in the National Restaurant Association’s monthly Restaurant Performance Index.

The RPI slipped to 101.3 in June, a decrease of 0.5 percent from May’s 101.8 results. But even with the decline, June marks the fourth consecutive month the RPI has stood above the 100 level, which represents expansion in the index of key industry indicators, the NRA says.

“Although the overall RPI dipped somewhat in June, it remained in positive territory as restaurant operators continued to report gains in both sales and customer traffic,” said Hudson Riehle, senior vice president of the NRA’s research and knowledge group. “Looking forward, restaurant operators remain generally optimistic about the business environment in the months ahead, with the Expectations Index holding steady at a 12-month high.”

The NRA’s Restaurant Performance Index consists of two components: the Current Situation Index, which measures current trends in same-store sales, traffic, labor and capital expenditures; and the Expectations Index, which measures operators’ six-month outlook for same-store sales, employees, capital expenditures and business conditions.

June’s Current Situation Index fell 0.9 percent to 100.7 from 101.6 in May. However, the index remained above 100 for the third month in a row.

The NRA said that while most restaurateurs reported higher same-store sales in June, the results were softer than those of May. Fifty-two percent of operators reported a rise in same-store sales between June 2012 and June 2013, a decline from the 63 percent who reported stronger sales in May. The NRA found that 34 percent of operators experienced a decline in same-store sales in June, a rise from 23 percent in May.

The NRA says that operators also saw weaker traffic results in June. According to the RPI, 43 percent of restaurateurs generated higher customer traffic levels between June 2012 and June 2013, while 39 percent said their traffic slowed. Forty-seven percent of operators in May saw an increase in customer traffic, compared with 30 percent that reported lower levels.

The Expectations Index was 102.0 in June, holding even at the 12-month high posted in May. The NRA said each of the four expectations indicators remained above 100 for the sixth month in a row, reflecting a general optimism about business conditions in the next several months.

In general, the RPI found that restaurateurs in June were modestly upbeat about future sales growth. Forty-six percent said they anticipate generating higher sales in six months — compared with the same period in the previous year — which is almost flat from the 47 percent who reported similarly in May. By comparison, 11 percent expect their sales to be lower in six months than it was during the same period in the previous years, compared with 8 percent last month.

Operators were somewhat more downbeat about overall economic conditions in the future. According to the NRA, 36 percent of restaurateurs anticipate that economic conditions will improve in six months, largely unchanged over the past six months. Sixteen percent said they expect economic conditions to deteriorate in the next six months, a slight increase over 15 percent in May.

The RPI is based on the responses to the NRA’s monthly Restaurant Industry Tracking Survey.

Contact Paul Frumkin at [email protected].
Follow him on Twitter: @NRNPaul

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