Restaurant Industry Outlook Improved in June with Solid Gain in Restaurant Performance Index
WAHINGTON, July 29 -- The outlook for the restaurant industry improved in June, as the National Restaurant Association’s comprehensive index of restaurant activity registered a solid gain. The Association’s Restaurant Performance Index -- a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry -- stood at 102.0 in June, up 0.6 percent from a level of 101.4 in May. In addition, June represented the 26th consecutive month above 100 -- a level which represents expansion in the Association’s composite index of eight key industry indicators -- and the strongest Index advance in 2005.
“June’s increase in the Restaurant Performance Index was driven by a strong gain in the current situation component of the Index,” said Hudson Riehle, senior vice president of Research and Information Services for the Association. “Restaurant operators reported solid performances in same-store sales, customer traffic, staffing levels and capital expenditures, leading to the strong June Index increase. Another contributing factor is the solid growth in summer travel and tourism, which typically boosts traffic in the nation’s 900,000 restaurants.”
The Restaurant Performance Index is based on the responses to the National Restaurant Association’s Restaurant Industry Tracking Survey, which is fielded monthly among restaurant operators nationwide on a variety of indicators including sales, traffic, labor and capital expenditures. The Index consists of two components -- the Current Situation Index and the Expectations Index. (Click on the following link to view this month’s Index report: http://www.restaurant.org/pdfs/research/index/200506.pdf ).
The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), rose to 101.3 in June -- up 0.9 percent from May and its strongest level in six months.
For the 23rd consecutive month, restaurant operators reported an increase in same-store sales. Fifty-eight percent of restaurant operators reported a same-store sales gain between June 2004 and June 2005 -- up from 50 percent of operators who registered a sales gain in May. Thirty percent of operators reported a same-store sales decline between June 2004 and June 2005, while 12 percent of operators reported no change in sales.
Customer traffic was also stronger in June. Forty-four percent of restaurant operators reported an increase in customer traffic between June 2004 and June 2005 -- up from 36 percent of operators who registered an increase in May. Thirty-six percent of operators reported a decline in customer traffic between June 2004 and June 2005, while 20 percent of operators reported no change in customer traffic.
Restaurant operators also reported an increase in staffing levels in June. Twenty-five percent of operators said they added employees between June 2004 and June 2005, while only 18 percent reported staffing declines. Fifty-seven percent of operators said their staffing levels were unchanged.
The Expectations Index, which measures restaurant operators’ six-month outlook for four industry indicators (same-store sales, employees, capital expenditures and business conditions), edged up 0.2 percent in June to a level of 102.7 -- its first gain in four months.
In terms of operator expectations, Riehle noted a difference between operators’ outlook for sales and the overall economy. “Although a majority of restaurant operators are expecting sales growth in the short-term, their outlook for growth in the overall economy is not as optimistic,” he said. “Fifty-five percent of operators expect their sales in six months to be higher than it was in the previous year, while 38 percent of operators expect the economy to be stronger in six months. A majority of operators -- 53 percent -- expect economic conditions in six months to be about the same as they are now.”
In addition to their positive sales outlook, a solid majority of restaurant operators are making plans for new capital expenditures. Sixty-one percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, up from 57 percent who reported similarly last month.
Restaurant operators are also planning to increase staffing levels during the next several months. Twenty-four percent of operators expect to have higher staffing levels in six months (compared to the same period in the previous year), while only 10 percent of operators expect to employ fewer workers in six months (compared to the same period in the previous year).
While the Restaurant Performance Index is consistently released on the last business day of each month, more detailed data and analysis can be found on Restaurant TrendMapper ( http://www.restaurant.org/trendmapper ), the Association’s subscription-based Web site that provides real-time analysis of restaurant industry trends.
A chart of the June Restaurant Performance Index is available on the Association’s website, http://www.restaurant.org/pressroom.
The National Restaurant Association, founded in 1919, is the leading business association for the restaurant industry, which is comprised of 900,000 restaurant and foodservice outlets and a work force of 12.2 million employees -- making it the cornerstone of the economy, career and employment opportunities and community involvement. Along with the National Restaurant Association Educational Foundation, the Association works to represent, educate and promote the rapidly growing industry. For more information, visit our Web site at http://www.restaurant.org
- Contact Information
- Annika Stensson
- Media Contact
- National Restaurant Association
- Contact via E-mail
This news content was configured by WebWire editorial staff. Linking is permitted.
News Release Distribution and Press Release Distribution Services Provided by WebWire.