Positive is GOOD – Right? Signs of the restaurant industry rebounding continue . . . here is an article from Restaurant News . . .
Buoyed by positive same-store sales and solid optimism among restaurant operators for continued growth, the outlook for the restaurant industry remained positive in April. The National Restaurant Association’s Restaurant Performance Index(RPI) – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 100.9 in April, essentially unchanged from a level of 101.0 in March. In addition, April represented the fifth consecutive month in which the RPI stood above 100, which signifies expansion in the index of key industry indicators.
“The restaurant industry continued to build momentum in April, with restaurant operators reporting positive same-store sales and customer traffic levels for the sixth time in the last eight months,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “Barring any significant external shocks, restaurant sales and traffic levels will continue to improve in the months ahead.”
The RPI is constructed so that the health of the restaurant industry is measured in relation to a steady-state level of 100. Index values above 100 indicate that key industry indicators are in a period of expansion, and index values below 100 represent a period of contraction for key industry indicators. The RPI consists of two components, the Current Situation Index and the Expectations Index.
Restaurant operators continued to report net positive same-store sales results in April. Fifty percent of restaurant operators reported a same-store sales gain between April 2010 and April 2011, down slightly from 52 percent of operators who reported higher same-store sales in March. In comparison, 31 percent of operators reported a same-store sales decline in April, matching the proportion of operators who reported lower sales in March.
Restaurant operators also reported a net increase in customer traffic in April, although levels were somewhat softer than the March results. Thirty-eight percent of restaurant operators reported an increase in customer traffic between April 2010 and April 2011, down from 45 percent of operators who reported higher traffic in March. In comparison, 35 percent of operators reported a traffic decline in April, up from 32 percent in March.
Capital spending activity among restaurant operators trended upward in recent months. Forty-eight percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, the highest level in nearly three years.
The Expectations Index, which measures restaurant operators’ six-month outlook for four industry indicators (same-store sales, employees, capital expenditures and business conditions), stood at 101.5 in April – down slightly from a level of 101.7 in March. Despite the decline, the Expectations Index stood above the 100 level for the ninth consecutive month, which signifies expansion in the forward-looking indicators.
Restaurant operators remain bullish about sales growth in the months ahead. Forty-seven percent of restaurant operators expect to have higher sales in six months (compared to the same period in the previous year), down slightly from 50 percent who reported similarly last month. In comparison, just 13 percent of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year, matching the proportion who reported similarly last month. http://www.restaurantnews.com/restaurant-industry-outlook-remains-positive-as-restaurant-performance-index-stood-above-100-for-fifth-consecutive-month/