U.S. restaurants are in their best shape since the recession: index
Restaurateurs are in a chipper mood these days, with the majority reporting customer and revenue gains; they also plan expansion, remodeling or equipment purchases.
The Restaurant Performance Index from the National Restaurant Assn. hit the same post-recession high in March that it did in December. The 102.2 level – a 0.3% increase from February – signals expansion in the industry, as the index has done for the last five months.
Eateries had to make many adjustments during and after the downturn. Upscale restaurants began casualizing to attract younger diners. Fast food chains took cues from fast casual competitors. Food prices continue to rise.
But this quarter, the industry reported a string of strong earnings at major companies such as Yum Brands Inc., McDonald’s Corp. and Olive Garden-owner Darden Restaurants Inc.
The restaurant association found that same-store sales improved in March compared to the prior year for 65% of restaurant operators. In February, 63% said the same.
More than half of restaurants enjoyed higher customer traffic levels in March. And 48% of operators said they spent money for equipment as well as on expansion and remodeling over the quarter – the highest level since before the recession.
They’re also looking forward to the next six months more than they have in more than a year. The expectations index showed positive outlook in the industry for the seventh straight month.
More than half of restaurateurs said they expect higher sales in the next half-year. In the highest percentage in more than four years, 56% of operators said they anticipate making capital expenditures.
Watch Hudson Riehle, a researcher with the restaurant association, discuss the report below:
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