RPI Dips To 101.5 But Cap-Ex Rises

Although same-store sales and customer traffic remained positive in September, the latest survey from the NRA’s Restaurant Performance Index registered both a modest decline in operators’ sales and a continued rise in the indicators that track capital expenditures.

The RPI stood at 101.4 in September, down slightly from a level of 101.5 in August. Despite the dip, September was the 31^st consecutive month in which the RPI stood above 100, the level at which the association considers the restaurant industry to be in expansion mode.

Operators’ sales continued to grow in September, according to the NRA, as 51% of restaurateurs said same-store sales increased in the month, a drop from 56% in August. But fewer operators reported a decline: 27% said same-store sales fell, a decrease from the 32% who reported a dip the previous month. September was the 19^th straight month in which a majority of operators reported a sales increase.

Along with higher sales and steady traffic levels, capital-spending activity remained positive in September. Sixty-six percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, which marked the 12^th consecutive month in which a majority of operators reported making an expenditure—an increase from 63% in August. Operators are building units and expanding: 62% of operators expect to buy equipment, expand or remodel in the next six months, up from 60% last month.

Those cap-ex numbers look even stronger in the face of dampened expectations. While operators’ sales continued to grow in September, fewer of them expect that trend to continue. Their sales outlook dipped to a two-year low in September, with 35% saying they expect their sales to increase over the next six months; that’s a decline from August’s 44%.

Traffic growth was more difficult to come by but remained largely the same in September: 42% said traffic increased from the 41% reported in August, while 38% said traffic declined, a slight increase from 37% the previous month.

The RPI is based on responses to the association’s Restaurant Industry Tracking Survey, which is fielded monthly among restaurant operators nationwide on a variety of indicators, including sales, traffic, labor and capital expenditures. The full report is available online at restaurant.org/rpi.”””