National Restaurant Association Restaurant Performance Index - April

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					                                                 National Restaurant Association
                                           Restaurant Performance Index – April 2005


Restaurant Industry Outlook Improved in                                                 Restaurant Performance Index
April with Modest Gain in RPI                                         104

The outlook for the restaurant industry continues to improve,
as the National Restaurant Association’s comprehensive
                                                                      103
index of restaurant activity edged up 0.1 percent in April.
The Association’s Restaurant Performance Index – a
monthly composite index that tracks the health of and                 102
outlook for the U.S. restaurant industry – stood at 102.2 in
April, up from 102.1 in March. April represented the 24th
consecutive month above 100, which represents expansion               101

in the Association’s composite index of eight key industry
indicators.
                                                                      100

Indicators of current industry performance were strong
across-the-board in April, led by robust same-store sales and         99
customer traffic levels. Restaurant operators are also bullish
about the future, with three out of five operators expecting
stronger sales in six months, compared to the same period             98

last year.                                                              Jul-02           Jan-03          Jul-03          Jan-04          Jul-04         Jan-05

                                                                            Source: NRA; Values Greater than 100 = Expansion; Values Less than 100 = Contraction
The Restaurant Performance Index is based on the responses
to the Association’s Restaurant Industry Tracking Survey,
which is fielded monthly among restaurant operators                           Current Situation & Expectations Indices
nationwide. The index consists of two components – the
Current Situation Index and the Expectations Index.                   105


                                                                      104
Beginning with the release of the January 2005 Restaurant
Performance Index, the current and historical index values            103
were rebased so that the health of the restaurant industry is
measured in relation to a steady-state level of 100. Index            102

values above 100 indicate that key industry indicators are in
                                                                      101
a period of expansion, while index values under 100
represent a period of contraction for key industry indicators.        100


Current Situation Index Rose to 101.2 in April                        99


April’s modest increase in the Restaurant Performance                 98
Index was the result of a gain in the current situation
                                                                      97
component of the index. The Current Situation Index, which
measures current trends in four industry indicators (same-            96
store sales, traffic, labor and capital expenditures), stood at         Jul-02           Jan-03          Jul-03          Jan-04          Jul-04         Jan-05
101.2 in April – its 3rd consecutive monthly gain and 0.3
                                                                                         Current Situation Index                     Expectations Index
percent above its March level of 100.9.
                                                                            Source: NRA; Values Greater than 100 = Expansion; Values Less than 100 = Contraction




National Restaurant Association                                   1                                 Restaurant Performance Index – April 2005
For the 21st consecutive month, restaurant operators                         Restaurant Operators’ Reporting of Same-Store
reported an increase in same-store sales. Fifty-seven percent                  Sales versus Same Month in Previous Year
of restaurant operators reported a same-store sales gain              75%
between April 2004 and April 2005 – up slightly from 56                                                                      65%
percent of operators who registered a sales gain in March.
                                                                                                                                                                 56%          57%
Twenty-eight percent of operators reported a same-store                                  53%
                                                                                                     55%
                                                                                                                                                     54%
sales decline between April 2004 and April 2005, while 15             50%    45%                                 47%                     46%
percent of operators reported no change in sales.
                                                                                   38%
                                                                                                                                               36%
                                                                                                                       33%
Customer traffic at restaurants continued to pick up in April.                                 30%
                                                                                                           28%
                                                                                                                                                           30%
                                                                                                                                                                       28%         28%
Forty-seven percent of restaurant operators reported an               25%                                                          20%
increase in customer traffic between April 2004 and April
2005 – up from 43 percent of operators who reported traffic
gains in March. Twenty-nine percent of operators reported a
decline in customer traffic between April 2004 and April              0%
                                                                             Aug-04 Sep-04 Oct-04 Nov-04 Dec-04 Jan-05                               Feb-05      Mar-05      Apr-05
2005, while 24 percent of operators reported no change in
                                                                                    Higher Same-Store Sales                                Lower Same-Store Sales
customer traffic.
                                                                       Source: National Restaurant Association, Restaurant Industry Tracking Survey
Expectations Index Stood at 103.0 in April; 7th
Consecutive Month at 103 or Higher                                          Restaurant Operators’ Outlook for Sales Volume in
The Expectations Index, which measures restaurant                            Six Months versus Same Period in Previous Year
operators’ six-month outlook for four industry indicators             75%
(same-store sales, employees, capital expenditures and                                                                       66%
                                                                                                                                         62%         63%
business conditions), edged down 0.2 percent in April to a                   59%         58%
                                                                                                     60%
                                                                                                                 61%
                                                                                                                                                                 60%         60%
level of 103.0. Despite the modest decline, April
represented the 7th consecutive month at a level of 103 or            50%
higher, which points toward continued industry growth in
the months ahead.

A strong majority of restaurant operators are optimistic              25%

about sales growth in the coming months. Sixty percent of                                      12%                                                                     10%         10%
                                                                                   9%                                                                      9%
restaurant operators expect to have higher sales in six                                                    8%
                                                                                                                       6%          7%          8%

months (compared to the same period in the previous year) –            0%
the 7th consecutive month at a level of 60 percent or higher.                Sep-04 Oct-04 Nov-04 Dec-04 Jan-05 Feb-05                               Mar-05      Apr-05 May-05
Only 10 percent of restaurant operators expect their sales                              Higher Sales in Six Months                         Lower Sales in Six Months
volume in six months to be lower than it was during the
                                                                       Source: National Restaurant Association, Restaurant Industry Tracking Survey
same period in the previous year, while 30 percent of
operators expect their sales to remain about the same.
                                                                             Proportion of Restaurant Operators that Plan to
In addition to their positive sales outlook, restaurant                     Make a Capital Expenditure in the Next Six Months
operators are also planning to increase staffing levels during
                                                                      80%
the next several months. Thirty-one percent of operators                                                                       69%
expect to have higher staffing levels in six months                   70%                              65%
                                                                               62%                                 63%                     63%         63%         62%         62%
(compared to the same period in the previous year), while                                   59%
                                                                      60%
only nine percent of operators expect to employ fewer
workers in six months (compared to the same period in the             50%
previous year).
                                                                      40%

A positive sign for the overall economy during the next               30%
several months is the strong outlook for capital outlays in the
                                                                      20%
restaurant industry. Sixty-two percent of restaurant
operators plan to make a capital expenditure for equipment,           10%
expansion or remodeling in the next six months – the 7th
consecutive month at a level above 60 percent.                         0%
                                                                             Sep-04      Oct-04      Nov-04 Dec-04           Jan-05      Feb-05      Mar-05      Apr-05      May-05

                                                                       Source: National Restaurant Association, Restaurant Industry Tracking Survey




National Restaurant Association                                   2                                   Restaurant Performance Index – April 2005
             National Restaurant Association Restaurant Industry Performance Index and Its Components
                                                                                                                                                         Apr-05
                                      December               January               February                March                  April                   over
                                        2004                  2005                   2005                  2005                   2005                   Mar-05


Restaurant Performance Index            103.1                  101.7                 102.1                 102.1                  102.2                  0.1%


Current Situation Index                 102.3                  100.1                 100.6                 100.9                  101.2                  0.3%

Current Situation Indicators:
     Same-Store Sales                   104.5                  101.0                 102.4                 102.8                  102.9                  0.1%
     Customer Traffic                   103.0                   99.8                 101.1                 101.0                  101.7                  0.7%
     Labor                              100.4                   98.8                  99.2                   99.3                  99.9                  0.3%
     Capital Expenditures               101.1                  100.6                  99.7                 100.0                  100.3                  0.3%


Expectations Index                      104.0                  103.4                 103.6                 103.2                  103.0                  -0.2%

Expectations Indicators:
     Same-Store Sales                   105.9                  105.4                 105.4                 105.0                  104.9                  0.0%
     Staffing                           102.0                  102.0                 102.3                 102.5                  102.2                  -0.3%
     Capital Expenditures               103.7                  102.5                 102.5                 102.4                  102.4                  0.0%
     Business Conditions                104.3                  103.6                 104.0                 102.9                  102.4                  -0.5%

Note: For each of the Indices and Indicators, a value above 100 signals a period of expansion while a value under 100 signals a period of contraction.




                                                                               Definitions
The National Restaurant Association’s Restaurant Performance Index is a statistical barometer that measures the overall health of
the U.S. Restaurant Industry. This monthly composite index is based on the responses to the National Restaurant Association’s
monthly Restaurant Industry Tracking Survey, which is fielded among restaurant operators nationwide on a variety of indicators
including sales, traffic, labor and capital expenditures. The Restaurant Performance Index is composed of two equally-weighted
components: the Current Situation Index and the Expectations Index.

The Current Situation Index is a composite index based on four ‘recent-period’ restaurant industry indicators:
    Same-Store Sales: Compares same-store sales volume in the reference month versus the same month in the previous year
    Customer Traffic: Compares customer traffic in the reference month versus the same month in the previous year
    Labor: Compares the number of employees and the average employee hours in the reference month versus the same month
            in the previous year
    Capital Expenditures: Measures capital expenditure activity during the three most recent months

The Expectations Index is a composite index based on four ‘forward-looking’ restaurant industry indicators:
    Same-Store Sales: Restaurant operators’ outlook for same-store sales in six months, compared to the same period in the
                        previous year
    Staffing: Restaurant operators’ expectations for their number of employees in six months, compared to the same period in
              the previous year
    Capital Expenditures: Restaurant operators’ capital expenditure plans during the next six months
    Business Conditions: Restaurant operators’ outlook for general business conditions during the next six months


For a complete analysis of the National Restaurant Association’s Restaurant Industry Tracking Survey including data broken out
by industry segment, as well as a host of other economic indicators that impact the restaurant industry, log on to Restaurant
TrendMapper at www.restaurant.org/trendmapper (subscription required).




National Restaurant Association                                               3                             Restaurant Performance Index – April 2005