Economic Concern Grows, But Restaurant Performance Index Remains Steady

The percentage of restaurant operators who have made or plan to purchase equipment or make another capital expenditure remains high even as concerns over the economy continue to grow.

The latest National Restaurant Association Restaurant Performance Index (RPI) found that 65 percent of operators made a capital expenditure for equipment, expansion or remodeling during the three months preceding March 2022. That was down from a reading of 71 percent for February, but still indicates a period of strong investment. Looking forward, 63 percent said they are planning a capital expenditure within the next six months, down from 71 percent in February. Still, the number represents the sixth consecutive month with a reading above 60 percent.

The continued willingness among operators to invest in their business mirrors the activity restaurants are seeing. Seventy-five percent of operators said their same-store sales rose between March 2021 and March 2022, while only 10 percent said sales were lower. Customer traffic was also strong for the month, with 69 percent of operators reporting more customers year-over-year.

However, the economic challenges sparked by the ongoing supply chain issues and inflation appear to be weighing on operators. The Expectations Index part of the monthly RPI, which measures restaurant operators’ six-month outlook, stood at 102.8 for March, down 0.2 percent from the previous month. Although most believed their store sales would continue to rise, operators demonstrated concern for the overall economy. Only 28 percent of operators said they expect economic conditions to improve in six months, and 33 percent expect they will worsen. That marked the first time in two years that operators had a net negative outlook for the economy for two consecutive months.

Despite these pressures, the RPI remained steady between February and March. The index saw a decline of only 0.1 percent, to 103.7. Any value above 100 signals an expansion period for the industry, while a number below 100 indicates a contraction. The RPI has remained above 100 since February 2021 as the industry began to recover from the COVID-19 pandemic.