RPI hits five-month high in November

Driven by improving same-store sales and customer traffic levels, the National Restaurant Association’s Restaurant Performance Index (RPI) hit a five-month high in November. The RPI stood at 101.2 in November, up 0.3 percent from October and the strongest level since June. In addition, the RPI stood above 100 for the ninth consecutive month, which signifies expansion in the index of key industry indicators.

“Recent growth in the RPI was fueled in large part by improving same-store sales and customer traffic levels,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the NRA. “In addition, restaurant operators are somewhat more confident that sales levels will improve, and a majority plan to make a capital expenditure in the next six months.”

The RPI consists of two components – the Current Situation Index (measuring current trends) and the Expectations Index (measuring restaurant operators' six-month outlook) – and tracks the health of and outlook for the U.S. restaurant industry.

The Current Situation Index stood at 101.2 in November, up 0.3 percent from a level of 100.9 in October and the highest level in six months. Aside from September’s downtick, the Current Situation Index remained above 100 in seven of the last eight months, which represents expansion in the current situation indicators.

A majority of restaurant operators reported higher same-store sales for the second consecutive month in November. Fifty-seven percent of restaurant operators reported a same-store sales gain between November 2012 and November 2013, up from 54 percent in October and the highest level in six months. In addition, 47 percent of restaurant operators reported higher customer traffic growth between November 2012 and November 2013, up from 43 percent who reported a traffic gain in October.

Along with higher sales and customer traffic, restaurant operators continued to report positive capital spending levels, with 54 percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, the seventh consecutive month in which a majority of operators reported making expenditures.

The Expectations Index stood at 101.1 in November, up 0.2 percent from a level of 100.9 in October. Restaurant operators are generally positive about sales expectations in the months ahead but are less optimistic about the direction of the economy. Despite an uncertain economic outlook, a majority of restaurant operators are planning for capital expenditures in the coming months.