Restaurant Performance Index Hits Five-Month High

December 31, 2013 04:16 AM



The National Restaurant Association's (NRA) comprehensive index of restaurant activity -- the Restaurant Performance Index (RPI) -- rose to a five-month high in November. The index was up 0.3% to 101.2 -- the strongest since June. The index spent its ninth straight month above the key 100-point level, which represents expansion in the industry.

"Recent growth in the RPI was fueled in large part by improving same-store sales and customer traffic levels," said Hudson Riehle, senior vice president of the Research and Knowledge Group for the National Restaurant Association. "In addition, restaurant operators are somewhat more confident that sales levels will improve, and a majority plan to make a capital expenditure in the next six months."

Restaurant operators are generally positive about sales expectations in the months ahead. Thirty-eight percent of restaurant operators expect to have higher sales in six months (compared to the same period in the previous year), up slightly from 36% who reported similarly last month. Meanwhile, only 9% of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year, while 53% expect their sales to remain about the same.

Meanwhile, the Conference Board reports after decreasing in November, its Consumer Confidence Index improved sharply in December to 78.1. The index is now close to pre-government shutdown levels and reflects better job conditions, says the Conference Board.

The improvement in both of these indices is good news for meat demand, as consumers tend to spend more money on luxury items -- such as higher-priced meat cuts -- when they are more confident about the economy.


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