Sales And Traffic Tank In February RPI, But Cap-Ex Measures Hold Up

Same-store sales and traffic took a beating in February, according to the latest tracking data from The National Restaurant Association’s Restaurant Performance Index, released Mar. 29. The overall index fell 0.8 point to 99.9, below the 100 level separating expansion from contraction. It was the fourth month in the last five that the index has been in contraction territory. But both capital expenditure markers held up in spite of the sales slowdown.

Hudson Riehle, senior v.p. of the association’s Research and Knowledge Group, said tough winter weather and the extra day during last year’s leap year were factors in the sales and traffic declines. The bite of the payroll tax increases and higher gas prices also were a factor.

The Current Situation same-store sales index fell 2.2 points, while that for customer traffic was off 2.3 points. For the first time in 21 months, fewer operators reported same-store sales increases than said sales decreased. The overall Current Situation Index dropped 1.4 points.

In spite of the short-term setbacks, operators surveyed remain reasonably optimistic about the next six months. The overall Expectations Index fell only 0.2 point. The outlook for business conditions six months out was off 0.5 point. But all markers in the Expectations Index remain above the 100 tipping point.

Both capital expenditure indicators, which have soared the past two months, maintained most of their gains. The marker for those that made a capital buy in the past three months fell 0.7 point to 99.7. The percentage making an expenditure fell from 52% in January to 48% in February. Those planning a capital purchase during the next six months fell to 57% in February from 59% in January. The index was off 0.4 point to 101.4. Both cap ex indicators are well above the average of the past five years.