Foodservice Equipment Reports

Capital Spending Measure Hits Record High As Rest Of NRA’s Performance Index Slipped In June

Restaurant operator concerns about mandated minimum wage increases and other factors is affecting their outlook about the future, according to data from the June Restaurant Performance Index survey fielded by the National Restaurant Association. But those concerns didn’t stop them from buying and planning to buy equipment and supplies. The overall RPI fell a moderate 0.4 point to finish at 102 in June, the NRA reported July 31. It was the 28th consecutive month the index stood above the 100 level that marks the difference between expansion and contraction. But both capital-spending measures rose sharply during the month, and the measure that tracks operators that made a capital expenditure during the past three months hit a record high.

The component that tracks operators’ outlook for general business conditions fell a whopping 2.2 points in June to 99.6. In a separate release on July 30, the NRA detailed how many restaurant operators are struggling—and coping—with increases in wages, fees and other government-mandated labor costs. The situation is apparently affecting their outlook, judging by the severe drop in the future business conditions component. The overall Expectations Index fell 0.6 point to 101.5 in the June survey as both the outlook for same-store sales and staffing also fell half a point.

The Current Situation Index dropped a more moderate 0.2 point. Same-store sales were off 0.5 point and traffic fell 0.2 point for the month, compared with the readings in May. The labor component, which tracks the number of employees and their hours worked, was off 0.8 point.

But in spite of the declines in the other RPI components, the index’s two capital-spending measures recorded strong increases in June. The component tracking operators that made a capital buy in the past three months jumped 0.8 point to 102.9, as 64% of those surveyed reported a purchase. It’s the highest reading for the component since NRA launched the RPI in June 2002. The component tracking those intending to make a capital purchase during the next six months rose a full point to 101.9, as 59% reported such intentions, up from 54% in May.

The entire RPI release can be found at restaurant.org.

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