Same-Store Sales Remain Strong, but Traffic Softens in March – NRN reports.
Restaurant operators’ sales remained strong in March, the National Restaurant Association said Thursday, but slower traffic led to a decline in its monthly Restaurant Performance Index.
The RPI fell 0.4 percent in March, to 102.2. The RPI is a monthly index that measures operators’ monthly sales and outlook of future conditions.
Despite the decline, the results marked the 25th straight month that the index was above 100, the level at which the NRA considers the industry to be in growth mode.
“Although a majority of restaurant operators reported higher same-store sales in March, customer traffic levels were somewhat dampened the NRA’s research and knowledge group said in a statement.
The index measures both the current situation and operators’ expectations for the coming months.
The NRA’s Current Situation Index was 101.8 in March, a slight decrease from 102.0 in February.
Based on the association’s survey, operators raised prices but saw traffic moderate during the month. According to the NRA, 62 percent of operators said same-store sales rose in March, while 24 percent said sales fell, nearly identical to the results in February.
Forty-five percent of operators said traffic rose during the month, a decrease from 57 percent who said the same in February. Thirty-four percent of operators said traffic fell, an increase from 32 percent who said the same in February.
It was noted that menu price inflation for the month rose 3 percent. Food costs rose 1.4 percent in March, but dairy prices fell 12 percent and cheese prices declined 16 percent. However, beef prices remain problematic, rising 19 percent year to date.
Restaurant operators’ expectations for the economy and their own sales remained high, although the association’s Expectations Index fell 0.7 percent from February, to 103.3.
According to the survey, 59 percent of operators expect to see higher sales in six months, which was unchanged from February.
Only 3 percent of operators expect lower sales volume, falling from 4 percent in February.
Thirty-five percent of operators expect economic conditions to improve in six months, a decrease from 37 percent in February. Only 8 percent expect conditions to worsen, and the remaining 57 percent expect conditions to remain the same.
Restaurant operators are still investing money into their businesses. According to the survey, 53 percent of operators plan to make a capital expenditure in the next six months, and 56 percent made a capital expenditure in the past three months.
The industry’s employment growth has slowed, however, with restaurants adding 8,700 jobs in March. The industry added 100,000 jobs in the first quarter of the year, about equal to the previous quarter. Restaurants are still adding employees at a higher rate than the overall economy.
Source: nrn.com, 4-30-2015