The restaurant industry continues to build momentum, according to the National Restaurant Association’s latest Restaurant Performance Index. The monthly index jumped 5 percent in March, reaching 105.1 – the highest level in at least 18 years. However, the associate cautions that the elevated RPI “overstates the current health of the restaurant industry, as the current situation indicators were up against the dampened comparisons of March 2020.”
Still, the trend is moving upward. The RPI measures the overall health of the industry, with a value greater than 100 indicating a period of expansion for the market while values less than 100 indicate contraction. February was the first time since the COVID-19 pandemic began that the RPI topped 100.
To determine the monthly RPI, the National Restaurant Association considers two components: the Current Situations 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 month. For March, the Current Situations Index rose from 95.4 to 104.4 as 77 percent of restaurant operators reported higher sales and 67 percent saw more customer traffic than the year before. Similarly, the Expectations Index increased from 104.8 to 105.7 as 78 percent of operators are anticipating sales to rise in the months ahead.
The improving outlook for the industry also appears to be encouraging spending. Fifty-eight percent of restaurant operators reported making a capital expenditure for equipment, expansion or remodeling during the past three months, an increase from 49 percent in February and the highest reading since February 2020.