With numbers matching those from December 2011, the first quarter of 2012 has shown continued strong growth. Restaurant owners reported higher same-store sales during March. The Restaurant Performance Index, RPI, a standard used to evaluate the health and future of the industry, indicated a 0.3 percent rise over the numbers posted in February.
5 Months of 100+
March’s numbers follow four other months where the RPI was reported to be over 100. This indicates that the foodservice industry is expanding in key areas. Customer levels held high throughout the month and improved traffic and sales numbers implies that customers are spending more then they have in the last four years. It is expected that these positive trends will spread to companies who supply restaurants as well.
Understanding the RPI
The RPI measures two different pieces of the financial puzzle. The first is the Current Situation Index which evaluates trends within a particular venue by measuring sales, expenses, and traffic. The second piece is the Expectations Index. As the name implies, this evaluates the outlook of the business over the next six months. Put together, the RPI gives a reasonably accurate look at how the food industry is doing and how it will be doing in the near future.
Good News for the Bottom Line
One of the potential advantages of continued profits is the likelihood of increased employment in the sector. Only a small percentage of restaurateurs expect to decrease their staff in the upcoming months. Additionally, may are expressing a degree of optimism in regards to growth and improved sales for much of 2012. In fact, many operators are feeling quite positive about the improving economy, with nearly a third expecting an uptick in profits in the coming half year.
The main areas of concern which may put a damper on the upward movement are fuel and commodity costs. Fuel costs traditionally rise during the summer months. Commodity prices have also been creeping higher, forcing restaurants to increase prices.
Jim Balis' Blog 