July RPI Boosted By Stronger Sales, Heavier Traffic

Driven by stronger same-store sales and customer traffic levels, the National Restaurant Association’s Restaurant Performance Index posted solid improvement in July. 

Showing its first gain in three months, the RPI stood at 102.7 in July, up 0.7 point from June. In further good news, July represented the 29th consecutive month in which the RPI stood above 100, which signifies expansion in the index of key industry indicators.

“July’s RPI gain was fueled primarily by an improvement in the current situation indicators,” said Hudson Riehle, Senior V.P. of the NRA’s Research and Knowledge Group. “Although a solid majority of operators reported higher same-store sales and customer traffic levels in July, their outlook for both sales growth and the economy is more cautious compared to recent months.”

The RPI’s Current Situation Index showed its strongest increase since December 2014, up 1.2 points from June to stand at 103.7 in July. It marks the 17th consecutive month the Index has stood above 100. Nearly three-quarters (73%) of restaurant operators reported a same-store sales gain between July 2014 and July 2015, up from 64% who reported higher sales in June. In addition, 59% of operators reported an increase in customer traffic between July 2014 and July 2015, up from 47% in June.

Seventy-two percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, marking the 10th consecutive month in which a majority of operators reported making an expenditure. Sixty-six percent plan to make a capital expenditure in the next six months, up from 59% in June.

That purchasing optimism fueled the Expectations Index, which stood at 101.7 in July, a slight gain from June’s 101.5. While 40% of operators anticipated greater sales in the next six months, only 16% expected economic conditions to improve in the next six months. Overall, July represented the 33rd consecutive month in which the Expectations Index stood above 100, which indicates restaurant operators remain generally positive about business conditions in the months ahead.