Franchising News
Same Store Restaurant Sales Up For 15th Straight Month
Written by Tim Morral
Published: 10/8/2012
NRA reports brisk restaurant sales during August; restaurant owners more optimistic about the economy than other business owners.
Although entrepreneurs in other industries are expressing doubts about the strength of the U.S. economy, restaurant owners are cautiously optimistic about the short-term economic outlook, largely due to an industry-wide trend of growth and expansion.
The National Restaurant Association (NRA) has reported that same-store restaurant sales increased for the 15th consecutive month in August. The NRA's monthly Restaurant Performance Index (RPI) stood at 100.6 in August, the tenth consecutive month that the index came in above 100.
"Growth in the RPI was driven largely by improving same-store sales and customer traffic results in August," said Hudson Riehle, Senior VP of the Research and Knowledge Group for the NRA. "Six out of 10 restaurant operators reported positive same-store sales in August, while customer traffic readings bounced back from July's net decline."
In general, restaurant owners are optimistic about the economy. Although virtually no owners expect to see aggressive growth in the coming months, 40 percent expect to higher sales in the next six months. Just 12 percent of owners and operators expect sales to decline over the next six months.
Capital spending continues to be a trouble spot for restaurants. Even though eateries have seen gains in sales and store traffic, only 41 percent of owners/operators made capital expenditures (in the form of equipment, expansion or remodeling) over the past three months. This is a noticeable decrease from the 46 percent of owners who reported capital expenditures over the same timeframe in last month's survey.
Knowing when and how to buy new equipment is a fundamental skill for every restaurant entrepreneur. Owners who wait too long to buy capital equipment can destabilize their restaurant's financial position; those who buy it too late can jeopardize their ability to serve their customers effectively.
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