Study: Restaurants perform positively in March

Washington, D.C. - As a result of higher same-store sales and a continued optimistic outlook for future business conditions, the National Restaurant Association's Restaurant Performance Index (RPI) remained in positive territory in March. The RPI, a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry, stood at 102.2 in March, down 0.4% from February's level of 102.6.



Despite the decline, March marked the 25th consecutive month in which the RPI stood above 100, which signifies expansion in the index of key industry indicators. The Index consists of two components – the Current Situation Index and the Expectations Index.



The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 101.8 in March – down slightly from a level of 102 in February. Despite the decline, the Current Situation Index stood above 100 for the 13th consecutive month, which signifies expansion in the current situation indicators.



A majority of restaurant operators reported higher same-store sales for the 13th consecutive month in March, with results coming in similar to February's performance. Sixty-two percent of restaurant operators reported a same-store sales gain between March 2014 and March 2015, while 24% reported lower sales. In February, 60% of operators reported higher same-store sales, while 24% reported a sales decline.



While same-store sales remained solidly positive, restaurant operators reported dampened customer traffic results in March. Forty-five percent of restaurant operators reported an increase in customer traffic between March 2014 and March 2015, down from 57% who reported higher traffic in February. Thirty-four percent of operators said their traffic declined in March, up slightly from 32% in February.



With same-store sales and customer traffic trending upward in recent months, restaurant operators beefed up capital spending. Fifty-six percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, which marked the sixth consecutive month in which a majority of operators reported making an expenditure.



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 102.6 in March – down 0.7% from February's level of 103.3. Despite the decline, March represented the 29th consecutive month in which the Expectations Index stood above 100, which indicates a positive outlook for business conditions in the coming months.



Restaurant operators remain solidly optimistic about sales growth in the coming months. Fifty-nine percent of restaurant operators expect to have higher sales in six months (compared to the same period in the previous year), unchanged from last month. In contrast, only 3% of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year, down from 4% last month.



Restaurant operators are also generally optimistic about the direction of the overall economy. Thirty-five percent of restaurant operators said they expect economic conditions to improve in six months, down slightly from 37% last month. Only 8% expect economic conditions to worsen in six months, while the remaining 57% expect economic conditions in six months to be about the same as they are now.



For the 19th consecutive month, a majority of restaurant operators said they are planning for capital expenditures in the months ahead. Fifty-three percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, down from 64% who reported similarly the previous month.