News

Restaurant traffic, sales post solid gains in August

October 1, 2014

Driven by stronger same-store sales and customer traffic levels and a more optimistic outlook among restaurant operators, the National Restaurant Association's Restaurant Performance Index posted a solid gain in August. The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 101.9 in August, up 1.0 percent from July and its first gain in three months. In addition, the RPI stood above 100 for the 18th consecutive month, which signifies expansion in the index of key industry indicators.

"The August gain in the RPI was fueled by stronger same-store sales and customer traffic results, aided by continued improving economic conditions," Hudson Riehle, NRA SVP, said in a news release. "Looking forward, restaurant operators remain generally optimistic about continued sales growth, while a majority plans to make a capital expenditure in the next six months. However, operators still report food costs and government among top challenges that continue to negatively affect the operating environment."

Current Situation Index  

The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 101.8 in August – up 1.1 percent from July and the strongest level in three months. 

Operators reported stronger same-store sales results in August, with a majority indicating higher sales for the sixth consecutive month. Sixty-two percent reported a same-store sales gain between August 2013 and August 2014, up from 54 percent who reported higher sales in July. In contrast, only 21 percent reported a same-store sales decline in August, down from 30 percent in July.   

Respondents also reported positive customer traffic results in August: 45 percent reported an increase in customer traffic between August 2013 and August 2014, up from 41 percent in July. In comparison, 31 percent reported a decline in customer traffic in August, down slightly from 34 percent in July.

Operators also continue to report solid capital spending activity. Fifty-nine percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, up from 50 percent who reported similarly last month.

Expectations Index

The Expectations Index, which measures the six-month outlook for operators, was at 102.1 in August – up 0.9 percent from July and the highest level in three months. 

Forty-five percent of restaurant operators expect to have higher sales in six months (compared to the same period in the previous year), down slightly from 47 percent who reported similarly last month. In contrast, only 5 percent expect their sales volume in six months to be lower than it was during the same period in the previous year, down from 13 percent last month.

While operators are generally optimistic about sales growth, their outlook for the economy remains mixed: 27 percent said they expect economic conditions to improve in six months, while 13 percent expect the economy to worsen. The remaining 60 percent expect economic conditions in six months to be about the same as they are now. 

For the 12th consecutive month, a majority said they are planning for capital expenditures in the months ahead. Fifty-nine percent of operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, up from 54 percent who reported similarly last month.