Good News! Restaurant Performance Index Climbs

Restaurant Performance Index Climbs its Highest in Five Months

 

Good news for the food service sector! In late December, the National Restaurant Association reported that its Restaurant Performance Index increased 0.6% from October to November, landing at a firm 100.6 in November, from October. This was the third straight month the index stood at over 100. But what does this mean in plain English?

 

It means the food service sector of the economy is growing – or at least, it means that key indicators of growth are showing expansion. Any Restaurant Performance Index over 100 indicates this expansion.

 

What Does the Restaurant Performance Index Mean for the Future?

 

“That’s great,” some of you may be saying. “It’s nice that this happened at the end of 2011. But what does 2012 hold for me?”

 

To understand that, it helps to understand where the Index comes from. Restaurant owners report same-store sales, customer traffic levels, outlook for the future, and expenditures planned for the next six months (such as remodeling, new equipment, etc). All of these are indicators of the health of the industry (or the lack thereof).

 

Same Store Sales Highest in Four Years

 

One of the most positive indicators is that, overall, operators showed their strong net positive same store sales in over four years.

 

This wasn’t just from individuals who started spending more per visit, during the holidays: customer traffic showed an increase in November as well.

 

Economic Outlook Good for Restaurants

 

The Restaurant Performance Index isn’t the only indicator that bodes well for the restaurant industry. The RPI also takes into consideration overall economic factors as well.

 

It also doesn’t hurt to consider that some areas hardest hit by the recession – such as Las Vegas’s housing and construction market – have been picking up. In some areas, more construction and related loans were approved in the first half of 2011 than in all 12 months of 2010 combined.

 

While the country may not be out of the forest just yet, the Restaurant Performance Index shows that things are looking up for the food service industry – which hopefully tells us something about the nation’s economy as a whole.

Go Green and Attract More Dining Customers in a Tough Economy

Restaurateurs throughout the nation are trying to figure out the best methods for attracting customers in a tough economy. As customers begin to return to their pre-recession entertainment and dining pleasures, restaurant owners are eager to understand this new market and the best way to build a thriving business that will last into the future.

NRA Research Supports Going Green
Restaurateurs aren’t the only ones curious about the spending habits of the recently bruised consumer. Research has been conducted by various agencies throughout the industry including the National Restaurant Association (NRA).

The NRA’s 2007 survey found that 62% of respondents weigh a restaurant’s environmental friendliness when choosing a place to dine. A full 44% of respondents in 2009 stated that they consider the restaurants’ energy and water conservation practices when choosing an eating establishment.

Even more telling was the Yankelovich data which revealed that an environmentally friendly, or green, restaurant is one which is likely to motivate them to dine there even during this tough economy.

Taking Steps towards Clearly Defined Goals
Some restaurateurs have steadily made changes over the years in order to build a more environmentally friendly establishment. Such restaurateurs are in a good position to attract the savvy “green” consumer; however be aware that some consumers are leery of being misled. It’s important that you carefully consider how you present the green efforts being made by the establishment.

Other restaurant owners have yet to create comprehensive environmental strategy. For these owners, creating clearly defined goals and taking steps to reach them is a good starting place. According to TerraChoice Environmental Marketing, consumers will reward these efforts by supporting the establishment.

Third Party Certification
One way to gain credibility with customers is to invest in third-party certification. Organizations like Green Seal and the Green Restaurant Association provide environmental assessments and consulting to help the restaurateur create an environmentally sustainable establishment.