Foodservice Equipment Reports

NRA’s Performance Index Surges To 10-Year High

The lowest gasoline prices in five years have restaurant operators feeling bubbly. The National Restaurant Association’s Restaurant Performance Index jumped nearly two full points in October to reach 102.8. It was the RPI’s highest mark since December 2004. The index has remained in expansion territory—readings above 100—for 20 consecutive months.

“The positive same-store sales and customer-traffic results suggest that restaurants are the beneficiaries of falling gas prices, which were down 88 cents since the end of June,” said Hudson Riehle, senior v.p.-Research and Knowledge Group for the association.  “Elevated food costs continue to top the list of challenges reported by restaurant operators, but overall they remain generally optimistic that business conditions will improve in the months ahead.”

All eight of the RPI’s components rose at least 1.1 points in October, including both indicators recording capital purchasing behavior. The Current Situation Index rose 2.1 points on the strength of 2-point and 3.2-point gains in the markers tracking same-store sales and customer traffic respectively. The sharp jumps confirm once again that the relative price of gas has significant impact on restaurant visits. The labor indicator, which measures the number of employees and hours, rose 1.6 points.

The Expectations Index rose 1.6 points, as the indicator tracking the outlook for business conditions in six months jumped 2.6 points. The outlook for same-store sales and for staffing rose 1.3 points each.

Both capital expenditure components had strong gains. The indicator, which tracks operator purchasing during the past three months, rose 1.5 points to 101.3, as 57% of those surveyed reported a purchase. The indicator for plans to purchase equipment or other capital goods rose 1.1 points to 101.8; 59% of operators plan a purchase during the next six months.

The complete RPI report is available at restaurant.org.

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