The Restaurant Performance Index gained 0.1% in September, which reflects a positive environment for continued restaurant industry growth.
"In addition to September's positive results, the third quarter level of the Restaurant Performance Index was a solid 1.9% above its level in the third quarter of 2003," said Hudson Riehle, senior vice president of research and information services. "The solid same-store sales and traffic levels, in combination with strong operator optimism, are all positive signs for the restaurant industry in the months ahead."
The Restaurant Performance Index is based on the responses to the National Restaurant Association's Restaurant Industry Tracking Survey, which is fielded monthly among restaurant operators nationwide on a variety of indicators including sales, traffic, labor and capital expenditures.
The September increase in the Restaurant Performance Index was fueled by a solid gain in the current situation component of the index, which increased 0.7% in September, marking its strongest gain in seven months. The index measures current trends in four industry indicators: same-store sales, traffic, labor and capital expenditures.
After posting soft sales results in August as a result of difficult comparisons, a majority of operators reported an increase in same-store sales in September, the NRA said.
Fifty-three percent of restaurant operators reported a same-store sales gain between September 2003 and September 2004 - up from 45% who reported a sales gain in August.
In addition, only 30% of operators registered a same-store sales decline in September, down from 38% who reported a decline in August. September marked the 14th consecutive month of positive same-store sales. Customer traffic results also improved sharply in September.
Forty percent of restaurant operators reported an increase in customer traffic between September 2003 and September 2004, up from 34% who registered an increase in August. Meanwhile, only 36% of operators reported a traffic decline in September, down from 43% who reported a decline in August.
In contrast to the trends in the Current Situation Index, the Expectations Index slipped somewhat in September. This index, which measures restaurant operators' six-month outlook for four industry indicators, declined 0.5% in September, which came on the heels of a solid 1.1% gain in August.
Although operator optimism slipped somewhat in September, a solid majority of operators expect to have higher sales in six months.
Fifty-eight percent of restaurant operators expect to have higher sales in six months (compared to the same period in the previous year), while only 12% of operators expect to have lower sales in six months (compared to the same period in the previous year).
Restaurant operators also remain optimistic about the direction of the overall economy.
Forty-seven percent of operators said they expect economic conditions in six months will be better than they are now, up from 45% who reported similarly last month.
Forty-three percent of restaurant operators expect economic conditions in six months to be about the same as they are now, while only 10% of operators expect economic conditions to worsen in six months.
Along with their positive sales outlook, operators are continuing to plan for staffing increases during the next several months.
Twenty-four percent of operators expect to have higher staffing levels in six months (compared to the same period in the previous year), while only 13% of operators expect to employ fewer workers in six months.