Friday, December 30, 2011

Restaurant Indexes Improve in November With Strongest Net Positive Sales Since August 2007

Just out from the National Restaurant Association:

 "Driven by positive same-store sales and an increasingly optimistic outlook among restaurant operators, the National Restaurant Association’s Restaurant Performance Index (RPI) rose to its highest level in five months. The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 100.6 in November, up 0.6 percent from October (see chart above, red line). In addition, November represented the second time in the last three months that the RPI stood above 100, which signifies expansion in the index of key industry indicators.

“The November increase in the Restaurant Performance Index was fueled by broad-based gains in both the current situation and forward-looking indicators,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “Restaurant operators reported their strongest net positive same-store sales results in more than four years, while customer traffic levels also grew in November.”

“Among the forward-looking indicators, restaurant operators’ outlook for both sales growth and the overall economy rose to their highest levels in seven months,” Riehle added.

Restaurant operators reported positive same-store sales for the sixth consecutive month in November. Fifty percent of restaurant operators reported a same-store sales gain between November 2010 and November 2011, while just 28 percent reported a same-store sales decline. This marked the strongest net positive sales performance since August 2007, when 54 percent of operators reported a sales gain and 29 percent reported lower sales.

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 100.9 in November – up 0.4 percent from October and the third consecutive monthly gain (see blue line in chart). November also marked the third consecutive month that the Expectations Index stood above 100, which represents a positive outlook among restaurant operators for business conditions in the months ahead."

MP: The improvements in the November restaurant indexes are consistent with the strong improvements in the Conference Board's Consumer Confidence Index in both November and December, and would suggest that the restaurant activity will continue to improve in December and into next year.  This is one more indicator that the U.S. economy and recovery are gaining momentum in the final months of 2011. 


At 12/30/2011 10:47 AM, Blogger morganovich said...

i think you may be confusing nominal growth with real growth.

all the same store sales increase at restaurants is inflation. real growth is flat to down.

food inflation has been high, and though food away from home has been lower than food as a whole, it is still about 3% (according to the BLS) and thus, there is no real SSS growth.

i don't think this is the good news that you are portraying it as.

At 12/30/2011 11:54 AM, Blogger Benjamin Cole said...

The glacial recovery continues. The last two readings on CPI were down to flat and unit labor costs are falling (especially in manufacturing).

The Fed, like the Bank of Japan, is beating inflation.

The Fed is not made up of business guys, but rather bankers. They genuflect to currency and gold, not robust economic growth.

We could do a Japan---where property and equity values have fallen 80 percent in the last 20 years and industrial output is down 20 percent. But they have mild deflation and the world's strongest currency.

Be careful what you wish for.

At 12/30/2011 1:31 PM, Blogger Larry G said...

I think there are better metrics.

for instance for same store sales:

1. - number of unique customers

( to differentiate the same people buying more burgers).

2. - increase in employees

If same store sales are UP


the number of unique customers is

AND there is an increase in employees

THEN you'd have a more complete picture as to whether they are really growing or not.

you need to have indicators that are not influence or corrupted by inflation effects.

At 1/01/2012 6:27 PM, Blogger Don Culo said...

I there a correlating graph to an increased number of fat Americans?


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