Traffic Softens, RPI Stays Positive as Restaurants Remain Hot
It's really something being a business reporter when times are good and your chosen industry is on the rise. Staying in touch with many restaurant owners, operators and consultants, it's clear times look scary good in the franchised restaurant world. I mean, really, I should probably parlay this job into starting my own concept don't you think?
Greece and Puerto Rico are facing historic turmoil, but the markets and U.S. economy remain strong. Consumer confidence jumped up yet again in June and the housing market keeps notching progressive gains. With growing hope in wages, lower mortgage delinquencies, record-high job openings and consumers with money to burn, restaurants are riding the very crest of this economic recovery.
The latest positive signal comes from the National Restaurant Association's Restaurant Performance Index (RPI) showing that traffic and same-store sales softened in May, while the index remains positive - its 27th consecutive month of restaurant industry expansion.
"The outlook for the restaurant industry remains positive, as the RPI stood above the 102 level for the eighth consecutive month," said Hudson Riehle, senior vice president of the Research and Knowledge Group for the NRA. "A majority of restaurant operators reported higher same-store sales in May, while operators also remain generally optimistic about an improving business environment in the months ahead."
In addition to the positive numbers, 60 percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months—a good sign that restaurant growth is helping propel many other areas of the U.S. economy.
Keep eating, building and buying!