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In This Section:
NPD’s CREST Reports Strong Second-Quarter Traffic Gains
NRA’s May Restaurant Performance Index Shows Slight Declines
Special Focus: Are Commercial Operator Sales Beginning to Plateau?
Technomic Top 100 Outforms Industry In ’03; Second 100 Lags
Blue Chip Economists Temper Growth Forecast
This issue's Industry Report Sponsor: New Age Industrial Corp. Inc. | Regulatory ReportSponsor: ES3
 
NPD’s CREST Reports Strong Second-Quarter Traffic Gains
Strong traffic gains across nearly all restaurant segments were recorded by NPD Foodworld’s second-quarter Consumer Reports on Eating Share Trends (CREST) consumer study. Overall restaurant traffic rose 2.2% for the March through May quarter versus the same quarter a year ago. Last year traffic fell 1.5% during the same period.
The strong gains did show signs of moderating as the quarter progressed. Traffic gained 1.3% in May versus the previous year, as soaring gas prices apparently took a toll.
While major chains continued to generate the bulk of the traffic gains, the report also noted that independent restaurants finally overcame seven consecutive quarters of negative traffic, led by casual dining concepts. Traffic for all independents was flat compared to a 5% loss in the year-earlier quarter.
NRA’s May Restaurant Performance Index Shows Slight Declines
The National Restaurant Association’s Restaurant Performance Index declined a slight 0.7 point May. The dip follows even smaller declines in the March and April Reports.
The RPI stood at 103.9 in May, down only slightly from an historical high of 105.0 in February, according to NRA’s B. Hudson Riehle, senior v.p. of research and information services.
Both the Current Situation and Expectations Indicators recorded declines. The Current Situation Index was off 0.9 point, led by nearly two-point declines in same-store sales and traffic. The Expectations Index fell 0.4 point.
The Capital Expenditures component of the Current Situations Index rose 0.5%, reflecting an increase in capital spending during the preceding three months. The Capital Expenditure component of the Expectations Index, a reflection of capital spending intentions during the next six months, declined 0.6 point.
Technomic Top 100 Outforms Industry In ‘03 While Second 100 Lags
Strong gains at many major quick-service and casual-dining chains propelled the Technomic Top 100 restaurant chain companies to 5% overall U.S. system sales growth in 2003, according to the annual report released in June by Technomic Information Services. This compares with total 2003 industry growth estimated by Technomic at 3.4%. Despite building slowdowns at many majors, Top 100 total U.S. units grew 2.6% to 147,137.
But second-tier chain companies, charted by the simultaneously released Technomic Second 100 study, managed U.S. sales growth of only 0.7%, as they were battered by traffic declines and store closures. Overall, units controlled by the Second 100 declined 3.5% in 2003 versus 2002.
The complete reports are available for purchase from Technomic Information Services at foodinfo@technomic.com or by phone at 312/876-0004.
Blue Chip Economists Temper Growth Forecast
After several months of great exuberance, the economists surveyed for Blue Chip Economic Indicators have pared back their forecast of U.S. Gross Domestic Product (GDP) real growth for 2004. The consensus forecast declined to a still remarably robust 4.5% in July survey from 4.7% in June.
Economists were responding to a number of factors that dampened their enthusiasm. The Federal government dramatically cut its estimate of first quarter 2004 growth from 4.4% to 3.9%. And that prompted many to also cut their forecasts for growth in the second quarter. The consensus now places second quarter 2004 growth at 4.1%, down 0.2 point from last month’s forecast.
The run-up in gasoline prices was a drag on first and second quarter growth, cutting into personal consumption expeditures. But moderating gas prices and an expectation that overall inflation pressures will ease are keeping most economists quite optimistic about the remainder of 2004 on the macroeconomic level.
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