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 improvement in the November restaurant indexes is 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.