Restaurant Performance Index Remains Above 100 For Seventh Consecutive Month, Reflecting Continued Positive Sales

The outlook for the restaurant industry remained positive for the months ahead, as the National Restaurant Association's Restaurant Performance Index (RPI) remained above 100 in May. The RPI - a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry - stood at 101.4 in May, down 0.2 percent from April's level of 101.6. Despite the decline, May represented the seventh consecutive month that the RPI stood above 100, which signifies expansion in the index of key industry indicators.

"Despite a soft patch in the overall economy, restaurant operators reported positive same-store sales for the 12th consecutive month," said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. "Looking forward, restaurant operators remain generally optimistic about sales growth in the months ahead, though they are somewhat less bullish about the direction of the economy."

Watch a video of Riehle providing commentary on the May RPI and the importance of tourism.

The RPI is constructed so that the health of the restaurant industry is measured in relation to a steady-state level of 100. Index values above 100 indicate that key industry indicators are in a period of expansion, while index values below 100 represent a period of contraction for 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 100.8 in May - down 0.2 percent from April's level of 101.0. Despite the decline, the Current Situation Index remained above 100 for the seventh consecutive month, which signifies expansion in the current situation indicators.

Restaurant operators reported positive same-store sales for the 12th consecutive month in May, with sales results similar to their April performance. Sixty-one percent of restaurant operators reported a same-store sales gain between May 2011 and May 2012, up from 57 percent who reported a sales gain in April. Meanwhile, 28 percent of operators reported lower same-store sales in May, up from 25 percent who reported similarly in April.

While sales results remained positive, restaurant operators reported softer customer traffic results in May. Forty-two percent of restaurant operators reported higher customer traffic levels between May 2011 and May 2012, down from 46 percent who reported positive traffic in April. In comparison, 39 percent of operators reported lower customer traffic levels in May, up from 30 percent in April.

Restaurant operators reported a slight uptick in capital spending. Forty-six percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, up slightly from 44 percent who reported similarly last month.

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 102.0 in May - down slightly from April's level of 102.2. May represented the ninth consecutive month that the Expectations Index stood above 100, which signifies a positive outlook among restaurant operators for business conditions in the coming months.

Restaurant operators are generally optimistic that their sales levels will improve in the months ahead. Forty-eight percent of restaurant operators expect to have higher sales in six months (compared to the same period in the previous year), down slightly from 52 percent who reported similarly last month. In comparison, only eight percent of restaurant operators expect their sales volume in six month