Restaurant Blowout in March, Industry Index Hits Highest Level Since Sept. 2007; Recession's Over!
"Fueled by improving sales and traffic levels and growing optimism among restaurant operators, the National Restaurant Association's comprehensive index of restaurant activity rose sharply in March. The Association's Restaurant Performance Index (RPI), a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry stood at 100.5 in March, up 1.4 percent from February and its strongest level since September 2007. In addition, the RPI rose above 100 for the first time in 29 months, which signifies expansion in the index of key industry indicators. Other highlights include:
1. For the first time in 22 months, restaurant operators reported net positive same-store sales. Forty-three percent of restaurant operators reported a same-store sales gain between March 2009 and March 2010, up from 28 percent of operators who reported higher sales in February. In comparison, only 36 percent of operators reported a samestore sales decline in March, well below the 57 percent of operators who reported negative sales in February.
2. Restaurant operators also reported a net increase in customer traffic in March, the first positive reading in 31 months. Forty-one percent of restaurant operators reported an increase in customer traffic between March 2009 and March 2010, up from 25 percent who reported higher customer traffic in February. Thirty-six percent of operators reported a traffic decline in March, down from 55 percent who reported lower traffic in February.
3. The Expectations Index, which measures restaurant operators’ six-month outlook for four industry indicators (same-store sales, employees, capital expenditures and
business conditions), stood at 101.9 in March up 0.5 percent from February and its strongest level in nearly three years. In addition, the Expectations Index stood above the 100 level for the third consecutive month, which signifies expansion in the forward-looking indicators.
4. Restaurant operators are also gaining confidence in the direction of the economy. Forty-six percent of restaurant operators said they expect economic conditions to improve in six months, up from 38 percent last month and the strongest level since March 2005. Meanwhile, only 12 percent of operators said they expect economic conditions to worsen in the next six months."