Half of Restaurants See Y-O-Y Rise in Same-Store Sales

January 4, 2012

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Financial Services | Food & Restaurants | Radio | Uncategorized

nationalrestaurantfederation-same-store-sales-yoy-marc-nov11-jan12.gif50% of restaurant operators reported a a same-store sales gain between November 2010 and November 2011, compared to just 28% who reported a sales decline, marking the strongest net positives sales performance since August 2007, according to [pdf] December 2011 figures from the National Restaurant Association. Restaurant operators also reported stronger customer traffic levels in November: 41% reported higher levels from the previous year, while 32% reported a traffic decline. By comparison, in October, 37% reported higher customer traffic, while 39% reported a traffic decline.

According to figures released in January 2012 by The NPD Group, US visits to restaurants dropped 0.6% in Q3 2011 as compared to Q3 2010. Data from NPD’s CREST service, which tracks consumer use of restaurants, indicates that spend was up 1.3% year-over-year, though, due to check growth of 1.8%.

Industry Outlook Improves

Driven by positive same-store sales, the National Restaurant Association’s Restaurant Performance Index (RPI) rose to 100.6 in November, up 0.6% from October, and its highest level in 5 months. November represented the second time in 3 months that the index stood above 100, signifying expansion in the index of key industry indicators.

The two components of the RPI, the Current Situation Index and the Expectations Index, both rose in November. The Current Situation Index, which measures current trends in 4 industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 100.2 in November, up 0.8% from October’s level of 99.5. The Expectations Index, which measures operators’ 6-month outlook for 4 industry indicators (same-store sales, employees, capital expenditures and business conditions), was at 100.9 in November, up 0.4% from October for its third consecutive monthly gain.

Sales Growth Optimism Seen

In December 2011, 41% of restaurant operators expected to have higher sales in 6 months compared to the same period in the previous year, representing a 17% jump from 35% that reported similarly in November. Just 12% of operators expected their sales volume in 6 months to be lower than it was during the same period in the previous year, down from 15% in November.

Bullish on Economy, Half Plan Capital Expenditure

27% of restaurant operators said in December that they expect economic conditions to improve in 6 months, up slightly from 26% in November, but representing a 50% increase from 18% in September 2011. Only 16% said they expected conditions to worsen, down from 22% in November and 31% in September.

Operators’ outlook for capital spending remains positive: 47% plan to make a capital expenditure for equipment, expansion or remodeling in the next 6 months, essentially unchanged from the levels reported in the previous 2 months.

About the Data: 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.

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