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Wednesday, March 31, 2010

Restaurant Index increases in February

by Calculated Risk on 3/31/2010 10:56:00 AM

This is one of several industry specific indexes I track each month.

Restaurant Performance Index Click on graph for larger image in new window.

The current situation for restaurants is still weak, but the index improved because of the outlook for sales growth, capital spending plans, and staffing levels.

Unfortunately the data for this index only goes back to 2002.

Note: Any reading below 100 shows contraction for this index.

From the National Restaurant Association (NRA): Positive Outlook Pushes Restaurant Performance Index To Highest Level in More Than Two Years

[T]the National Restaurant Association’s Restaurant Performance Index (RPI) rose to ... 99.0, up 0.7 percent from January and its strongest level since November 2007.

“The RPI’s strong gain in February was the result of broad-based improvements among the forward-looking indicators,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “Restaurant operators’ optimism for sales growth stood at its strongest level in 29 months, with capital spending plans also rising to a two-year high.”

“In addition, restaurant operators reported a positive outlook for staffing gains for the first time in more than two years,” Riehle added. “This bodes well for replacing the more than 280,000 eating and drinking place jobs lost during the recession.”
Restaurant operators reported negative same-store sales for the 21st consecutive month in February, with the overall results similar to the January performance.
Customer traffic also remained soft in February, as restaurant operators reported net negative traffic for the 30th consecutive month.
Along with continued soft sales and traffic performances, capital spending activity continued to drop off.
emphasis added