NRA’s Performance Index Rose Again In April

Restaurant operators are apparently getting over the jitters many had in the first quarter. Fueled by gains in all four components of the Expectations Index, as well as improved current same-store sales and traffic, the National Restaurant Association’s Restaurant Performance Index rose for the second straight month, according the April report released May 31. The overall index added 0.4 point to 101. It has now held above the 100 level that separates industry expansion from contraction for three of the four months in 2013. One capital spending marker in the index fell in the April survey, while the other rose.

The NRA, in the commentary accompanying the release, pointed to a “healthier outlook for the business environment in the coming months” as driving the increase. “In particular, there was a dropoff in the proportion of operators who expect conditions to worsen in the months ahead, which suggests a broadening of the perspective that the expansion is firmly entrenched.”

A 0.9 point gain in the Current Situation same-store sales indicator and a 0.4 point rise in the traffic marker helped push the Current Situation Index 0.3 point higher. The CSI moved into expansion territory for the first time this year though just barely at100.1. The CS labor indicator rose 0.5 point. Three of the four CSI components remain below 100, however, with only same-store sales above the line.

The Expectations Index rose half a point in April to close at 101.9. The EI has signaled expansion since December, with all four components above the 100 tipping point since January. The same-store sales indicator was up 0.2 point, the staffing outlook marker rose 0.7 point and the component measuring operators’ view of business conditions six months out, gained 0.3 point.

The only indicator in the RPI to decline in April was that measuring capital purchases in the past three month. This component of the CSI fell back below 100, down 0.8 point to 99.4. The percentage of operators saying they made a capital buy fell to 47% from 51% in March. On the other hand, more operators plan to make a capital expenditure during the next six months. The EI cap-ex marker rose 0.7 point with 59% planning a purchase, up from 55% in the previous month’s survey.

The complete RPI report is available at restaurant.org.”””