Operators Plan to Delay Capital Purchases

The National Restaurant Association’s Restaurant Performance Index is predicting a slow rebound for the industry based on its April survey of operators. Respondents see lower spending, employment and capital spending in the months ahead than previously anticipated.

The survey comes the same day that the association analysis of preliminary data released by the Bureau of Labor Statistics (BLS) concludes that the restaurant industry lost more than three decades of jobs in the last two months. It says that the industry lost 5.5 million jobs in April, on a seasonally-adjusted basis. The industry also lost half-million jobs in March, which is nearly three times more jobs than any other industry, according to the association.

Key findings from the association's April survey include:

Expansions and remodeling are now on back burner.

  • 28 percent of respondent said they plan to make a capital expenditure for equipment during the next six months. By contrast, 54 percent of operators said that  they would make such purchases in the January – March surveys.
  • 21 percent of operators said they plan to make a capital expenditure for expansion or remodeling during the next six months – that’s half of the 42 percent who reported similarly in the January – March surveys.

Expectations for sales are low.

  • 74 percent of operators said they expect their sales volume in six months will be lower than it was during the same period in the previous year.
  • 19 percent think sales in six months will be back above year-ago levels.
  • More than 80 percent of casual dining, fine dining and fast casual operators expect their sales in six months will still remain below previous-year levels.
  • 38 percent of quick serve anticipate higher sales in six months, but fully one-half do not think their sales will have recovered by late-2020.

Hiring will not return in the immediate future.

  • 63 percent said they expect staffing levels in six months will be lower than it was during the same period in the previous year.
  • 14 percent think their staffing levels in six months will exceed year-ago levels.
  • More than seven in 10 table service operators and two-thirds of fast casual operators expect to employ fewer people in six months than they did in the previous year.
  • However, the association says the QSR presents a “,ixed bag,” with  25% of operators expecting higher levels.

The full survey report can can be found here.


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