US restaurant outlook improves
US. Driven by restaurant operators' more optimistic outlook for future business conditions, the National Restaurant Association's Restaurant Performance Index (RPI) posted a modest gain in the first month of 2014. The RPI stood at 100.7 in January, up 0.2% from December's level of 100.5. In addition, the RPI remained above 100 for the 11th consecutive month, which signifies expansion in the index of key industry indicators.
"Restaurant operators are more optimistic about business conditions in the months ahead, which is also reflected in ramped up plans for capital spending," said Hudson Riehle, senior vice-president of the Research and Knowledge Group for the Association. "However, current situation indicators such as customer traffic were dampened in January, due in large part to adverse weather conditions."
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 US restaurant industry.
The Current Situation Index stood at 99.5 in January – unchanged from December and the second consecutive month below 100. Although restaurant operators reported net positive same-store sales, softness in the customer traffic and labour indicators outweighed the performance. A bright spot remains operators' capital expenditure activity; 57% made a capital expenditure in the last three months, compared to 51% who reported similarly the month before.
The Expectations Index stood at 101.8 in January – up 0.3% from December and the highest level in seven months. In addition, January represented the 15th consecutive month in which the Expectations Index stood above 100, which indicates that restaurant operators remain optimistic about business conditions in the coming months.