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Restaurant Operators Curb CAPEX Spending Despite Uptick in August Traffic

October 05, 2012, 08:00 AM
Filed Under: Restaurant

Buoyed by stronger same-store sales and customer traffic levels, the National Restaurant Association’s Restaurant Performance Index (RPI) posted a modest gain in August. The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 100.6 in August, up 0.4 percent from July and the first increase in five months. August represented the tenth consecutive month that the RPI stood above 100, which signifies continued expansion in the index of key industry indicators.

“Growth in the RPI was driven largely by improving same-store sales and customer traffic results in August,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “Six out of 10 restaurant operators reported positive same-store sales in August, while customer traffic readings bounced back from July’s net decline.”

Despite the uptick in sales and customer traffic, restaurant operators reported somewhat lower levels of capital spending. Forty-one percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, down from 46 percent who reported similarly last month. Restaurant operators’ outlook for capital spending dipped somewhat from recent months. Forty-four percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, down from 49 percent who reported similarly last month.

Restaurant operators are not exactly bullish about the direction of the overall economy, though their outlook improved somewhat from last month. Twenty-nine percent of restaurant operators said they expect economic conditions to improve in six months, up from 22 percent who reported similarly last month. Meanwhile, 20 percent of operators said they expect economic conditions to worsen in the next six months, while 51 percent think conditions will stay about the same.

The RPI 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 full report and a video summary are available online.







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