WASHINGTON — In an indication that business conditions may be improving for U.S. restaurants, the National Restaurant Association's Restaurant Performance Index rose to 100.3 in September, according to the association's most recent report.
The index tracks the current health and future outlook of the restaurant industry, based on responses to the association's Restaurant Industry Tracking Survey, which is fielded monthly among restaurant owners and operators nationwide. Since late 2007, index scores have been consistently trending below 100, indicating worsening conditions, prior to a brief spike this spring.
“The RPI's solid gain in September was the result of broad-based improvements among both the current situation and forward-looking indicators,” Hudson Riehle, senior vice president of the association's Research and Knowledge Group, said in a report. “Restaurant operators reported positive same-store sales and customer traffic levels for the first time in six months, which propelled the RPI's Current Situation Index to its highest level in nearly three years.”
The RPI is actually a composite of two separate indices produced by the survey — the Current Situation Index and the Expectations Index.
The Current Situation Index, which measures concrete data such as same-store sales, traffic, labor and capital expenditures, reached only 99.4 in the latest report. So, business is still sluggish for many restaurants. Thirty-eight percent of operators actually reported a same-store sales decline in this current report.
Still, that 38% decline was an improvement over the 43% of operators who reported a decrease in August. And, survey results indicate that the restaurant industry enjoyed a net increase in same-store sales growth for the first time in six months.
As usual, the surveys reveal that restaurant operators tend to be cautiously optimistic about the future. The Expectations Index, which asks operators to project how conditions will change for their business during the next six months, produced an index score of 101.1, with many respondents saying that they expect sales volume at their restaurant to grow while the U.S. economy improves. All told, 43% said they expect to see higher sales at their business in six months, compared with 38% of the respondents the month prior. And, in the current survey, 38% said they expect the economy to improve in the coming months, up from 25% during the month before. Only 16% of operators said they expect the economy to worsen.
Many operators are sufficiently optimistic to plan on investing in their business, with 47% saying that they plan to make a capital expenditure for equipment, expansion or remodeling during the next six months.