17th Consecutive Month of Same-Store Sales Increase

Stronger same-store sales and improved customer traffic led to a raise in the National Restaurant Association’s Restaurant Performance Index (RPI) for March. The RPI rose 0.9 percent to 101.9 for the month.

The rating measures the overall health of the restaurant industry. An RPI greater than 100 indicates a period of expansion for the market while values less than 100 indicate contraction. The rating has been solidly above 100 since 2017. To determine the monthly RPI, the NRA looks at two components: the Current Situation Index, which measures current trends in same-store sales, traffic, labor, and capital expenditures; and the Expectations Index, which measures operators’ outlook for the next six months.

Prior to the March RPI, the Current Situation Index had declined for three consecutive months. That turned around with the latest report, as the Current Situation Index rose by 1.5 percent from 100.3 in February. That increase can be attributed to better same-store sales and customer traffic. Sixty percent of restaurant operators reported a same-store sales increase between March 2018 and March 2019, up from 52 percent reporting better sales in January and February. It was the 17th straight month in which restaurant operators reported a net increase in same-store sales.

Meanwhile, 48 percent of restaurant operators reported an increase in customer traffic between March 2018 and March 2019, the highest level in more than a year and up from 37 percent in February. The number of operators reporting a decline in traffic also fell from 44 percent in February to 30 percent in March. This month represented the strongest customer traffic reading since December 2017, according to the NRA.

With sales up, operators continue to invest back into their businesses. According to the NRA, 53 percent of operators said they made a capital expenditure for equipment, expansion, or remodeling during the previous three months, and 61 percent said they plan to make a capital expenditure in the next six months.