Same-store sales and traffic took a modest dive in December, but restaurant operators are still optimistic about the months ahead, according to the latest Restaurant Performance Index by the National Restaurant Association.
The Restaurant Performance Index, a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry, was 100.5 in December. The 0.6-percent drop compared with November marks the RPI’s first decline in three months.
Despite the December decline, the RPI remained above 100 for the tenth consecutive month, signifying key industry indicators are expanding.
Hudson Riehle, senior vice president of the NRA’s research and knowledge group, said bad winter weather in many parts of the country might be partly to blame for the December dip. “Despite the softer December results, restaurant operators remain generally optimistic about business conditions in the months ahead,” he said.
The RPI consists of two components: the Current Situation Index and the Expectations Index. The Current Situation Index stood at 99.5 in December, falling 1.7 percent from November and the lowest level in 10 months. The index measures trends in same-store sales, traffic, labor and capital expenditures.
Operators reported net positive same-store sales for the month, the survey found. However, softness in consumer traffic and labor indicators outweighed the sales performance. That brought the index below the 100 benchmark, indicating a contraction.
Compared with a year ago, 44 percent of operators reported a same-store sales gain, but that was a decline from the 57 percent of operators who reported a gain in November. By comparison, 41 percent of operators reported a decline in same-store sales in December, increasing from 29 percent in November.
Guest visits also declined at year’s end, with only 30 percent of operators reporting an increase in traffic compared to 47 percent who recorded increases in November. By comparison, 46 percent of operators said traffic fell in December, rising from 35 percent in November.
Still, restaurant operators say they are continuing to spend on equipment, expansion or remodeling. During the last three months, 52 percent of operators said they made a capital expenditure, marking the eighth consecutive month in which a majority of operators reported making such investments.
The Expectations Index stood at 101.5 in December, an increase of 0.4 percent from 101.1 in November. It marked the 14th consecutive month in which the Expectations Index stood above 100, indicating that operators are generally optimistic about expected sales trends.
Thirty eight percent of operators said they expect sales to be higher in the next six months, the same percentage as in November. Another 13 percent of operators expect their sales volume to be lower in the next six months, while almost half of operators — 49 percent — said they expect sales to remain about the same.
Operators, however, were less optimistic about the economy overall. In the next six months, 28 percent of those surveyed said they expect economic conditions to improve, while 16 percent of them expect conditions to get worse. The remaining 56 percent expect more of the same from the economy.
Despite that mixed view, 61 percent of operators said they plan to make a capital expenditure in the next six months, rising from 55 percent who said the same in November.
The RPI is based on the NRA’s monthly Tracking Survey, which includes responses from restaurant operators nationwide.