E&S Buying Plans Jump In NRA’s March RPI

In spite of worries about rapidly rising gasoline prices during the month, the National Restaurant Association’s Restaurant Performance Index moved moderately higher and matched its post-recession high of 102.2, according to the March tracking survey.

In addition, both capital-expenditure markers moved higher, with the component tracking operators’ intention to make a purchase in the next six months surging 1.3 points to 101.2, its highest level since September 2007. In the March survey, 56% of operators said they intend a cap-ex purchase, up from 49% in the February report.

The Current Situation Index fell a slight 0.1 point but remained at 102, above the 100 level that signals expansion for the fifth consecutive month. The Expectations Index rose 0.4 point to 102.4, matching its post-recession high as well.

The components tracking same-store sales and customer traffic were off very slightly in March from the February reading, but the differentials between those reporting positive sales and traffic versus March ’10 remained well ahead of those reporting declines. For same-store sales, for example, 65% of operators said they increased in March, versus only 21% noting declines.

And the gap is even wider for sales expectations during the next six months, with 53% foreseeing higher sales and only 9% declines.

The indicator tracking operators that made a capital expenditure during the past three months was up 0.2 point and remains the only component in the eight-component RPI below the 100 tipping point at 99.6.

“The first quarter finished strong with a solid majority of restaurant operators reporting higher same-store sales and customer traffic levels in March,” said Hudson Riehle, senior v.p. of the  Research and Knowledge Group for the association. “In addition, restaurant operators are solidly optimistic about sales growth and the economy in the months ahead.”  He added that the cap-ex plans component’s four-and-a-half year high “will have positive implications throughout the supply chain of the restaurant industry.”