Tuesday, March 31, 2015

Restaurant Performance Index shows Expansion in February

by Bill McBride on 3/31/2015 02:18:00 PM

Here is a minor indicator I follow from the National Restaurant Association: Softer sales offset by stronger optimism in February's RPI

Despite dampened sales and customer traffic levels as a result of extreme weather in parts of the country, the National Restaurant Association’s Restaurant Performance Index (RPI) held relatively steady in February. The RPI stood at 102.6 in February, down slightly from a level of 102.7 in January.

In addition, February marked the 24th consecutive month in which the RPI stood above 100, which signifies expansion in the index of key industry indicators.

“With same-store sales and customer traffic levels being impacted by challenging weather conditions in parts of the country, the Current Situation component of the RPI declined in February,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “However, this was offset by a solid improvement in the Expectations component of the index, as restaurant operators are increasingly optimistic about business conditions in the months ahead. As a result, the overall RPI held relatively steady in February.”
emphasis added
Restaurant Performance Index Click on graph for larger image.

The index decreased to 102.6 in February, down from 102.7 in January. (above 100 indicates expansion).

Restaurant spending is discretionary, so even though this is "D-list" data, I like to check it every month. This is another solid reading - and it is likely restaurants are benefiting from lower gasoline prices and are having to raise wages - a little - to attract and retain workers.