Positive same-store sales and a growing sense of optimism brought the restaurant industry’s performance in November to its highest level in five months, according to a monthly report from the National Restaurant Association.
The Restaurant Performance Index, or RPI, measures key indicators that offer insight into the health of the industry and its outlook going forward.
The RPI for November was 100.6, up 0.6 percent from October, the NRA said Friday. A number above 100 signifies expansion of key industry indicators, while an RPI below 100 indicates contraction.
“The November increase in the Restaurant Performance Index was fueled by broad-based gains in both the current situation and forward-looking indicators,” said Hudson Riehle, the NRA’s senior vice president of the research and knowledge group. “Restaurant operators reported their strongest net positive same-store sales results in more than four years, while customer traffic levels also grew in November.”
Riehle added that restaurant operators said their outlook for sales growth and for the economy overall rose to their highest levels in seven months.
The RPI consists of two components: the Current Situation Index, which measures industry indicators, such as same-store sales, traffic, labor and capital expenditure trends, as well as the Expectations Index, which measures operators’ six-month outlook for same-store sales, employees, capital expenditures and business conditions.
For November, the Current Situation Index was 100.2, up 0.8 percent from October’s level of 99.5.
November marked the sixth consecutive month of positive same-store sales, with more than 50 percent of operators reporting gains since November 2010, while 28 percent reported a decline.
That was the strongest net gain since August 2007, when 54 percent of operators reported a sales gain and 29 percent reported decreased sales, the NRA said.
Forty-one percent of operators said they had stronger customer traffic, and 46 percent said they made capital expenditures for equipment, expansion or remodeling in the last three months.
The Expectations Index stood at 100.9 in November, up 0.4 percent from October, and the third consecutive monthly gain.
Forty-one percent of restaurant operators said they expected sales increases in the next six months, compared with the same period last year, while only 12 percent said they thought sales would decline.
When asked about the overall economy in the next six months, 27 percent said they expected conditions to improve, up slightly from 26 percent in October, while 16 percent said they thought conditions would get worse, down from 22 percent with similar lack of optimism in October.