RESTAURANT ECONOMIC SNAPSHOT

All indicators are for January 2020 A monthly summary of key indicators from National Restaurant Association research; More details at Restaurant.org/Research

RESTAURANT PERFORMANCE INDEX

Current Situation Index: 101.6 +1.1% JANUARY 2020: 101.8 +0.7% Same-store sales: 66% report increase over January 2019 Customer traffic: 52% report increase over January 2019 Capital spending: 52% report making expenditure in last 3 months

Expectations Index: 102.0 +0.2%

Sales outlook: 40% expect higher sales in 6 months Capital spending: 63% plan to make expenditure in next 6 months Economy: 26% expect economic conditions to improve in 6 months

KEY TAKEAWAYS: The National Restaurant Association’s Restaurant Performance Index (RPI) posted a moderate gain in January. The increase was largely the result of same-store sales and customer traffic readings bouncing back from their 1/04 1/20 dampened December levels. January represented the first time Values greater than 100 = Expansion; Values less than 100 = Contraction in over twoyears that a majority of restaurant operators Source: National Restaurant Association; see reverse for more on RPI reported gains in both same-store sales and customer traffic levels during the same month.

RESTAURANT SALES AND JOBS

Total eating and drinking place sales Eating and drinking place employment (in billions of current dollars) (change from the previous month) $66 +2.3% 80k $65 1/19 - 1/20 60k $64 40k $63 $62 20k $61 0 $60 -20k 0 -40k 2/19 3/19 4/19 5/19 6/19 7/19 8/19 9/19 10/19 11/19 12/19 1/20 2/19 3/19 4/19 5/19 6/19 7/19 8/19 9/19 10/19 11/19 12/19 1/20

Source: U.S. Census Bureau; figures are seasonally-adjusted Source: Bureau of Labor Statistics; figures are seasonally-adjusted

KEY TAKEAWAYS: Restaurant sales posted a solid gain for the KEY TAKEAWAYS: Employment in the restaurant industry rose second consecutive month. Eating and drinking place sales at a steady pace in recent months. According to preliminary totaled $66.5 billion in January on a seasonally-adjusted basis, figures from the Bureau of Labor Statistics, eating and drinking which was up 1.2 percent from December’s volume of $65.8 places added a net 24,400 jobs in January on a seasonally- billion. January’s healthy gain followed a similar increase in adjusted basis. January represented the fifth time in the last December, and propelled restaurant sales to their highest six months that the restaurant industry added more than monthly volume on record. As a result of the recent gains, 20,000 jobs. This was a solid improvement from the modest restaurant sales stood 7.4 percent above their year-ago level. gains during mid-2019. FOOD COSTS & MENU PRICES Wholesale food prices (PPI – All Foods) Menu prices, grocery store prices & overall (percent change from previous month) U.S. inflation (percent change from same period in previous year) 2% +2.3% 1/19 - 1/20 4% 1% 3.1% 3% 0 2.5% 2% -1%

1% -2% 0.7% -3% 0

2/19 3/19 4/19 5/19 6/19 7/19 8/19 9/19 10/19 11/19 12/19 1/20 Prices Store PricesMenu Overall Inflation RateGrocery

Source: Bureau of Labor Statistics Source: Bureau of Labor Statistics

KEY TAKEAWAYS: The Producer Price Index for All Foods – which KEY TAKEAWAYS: Menu prices increased 3.1 percent in the 12 represents the change in average prices paid to domestic months ending January, which represented the eighth straight producers for their output – dipped 0.5 percent in January. month with 12-month gains above 3 percent. Within the January’s decline followed a 0.2 percent downtick in December. food-away-from-home sector, fullservice menu prices outpaced However, as a result of steady gains during much of 2019, growth in quickservice prices in recent months. Fullservice average wholesale food prices remained 2.3 percent above their restaurant menu prices increased 3.4 percent in the 12 months year-ago level. ending January 2020, while quickservice prices were up 2.9 percent. THE ECONOMY

Total U.S. employment (change from the previous month)

350k Total nonfarm employment +225,000 +1.5% 300k 1/19 - 1/20 Average hourly earnings +0.2%

250k Unemployment rate 3.6%

200k Real Disposable Personal Income +0.5%

150k Real Personal Consumption Expenditures +0.1% 100k KEY TAKEAWAYS: The national economy added a net 225,000 50k jobs in January on a seasonally-adjusted basis, which represented the fourth time in the last six months with gains of over 200,000 0 jobs. The National Restaurant Association expects employment 2/19 3/19 4/19 5/19 6/19 7/19 8/19 9/19 10/19 11/19 12/19 1/20 growth to continue at a moderate pace, adding an average of

Source: Bureau of Labor Statistics 140,000 jobs each month during 2020. This would be sufficient to keep the national jobless rate below 4 percent and near a five decade low.

The National Restaurant Association’s Restaurant Performance Index (RPI) is a monthly composite index that tracks the health of and the outlook for the U.S. restaurant industry. Launched in 2002, the RPI is released on the last business day of each month. The RPI consists of two components — the Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffc, labor and capital expenditures), and the Expectations Index, which measures restaurant operators’ six-month outlook for four industry indicators (same-store sales, employees, capital expenditures and business conditions).

Founded in 1919, the National Restaurant Association is the leading business association for the restaurant industry, which comprises more than 1 million restaurant and foodservice outlets and a workforce of 15.6 million employees. We represent the industry in Washington, D.C., and advocate on its behalf. We operate the industry’s largest trade show (NRA Show May 18-21, 2020, in Chicago); leading food safety training and certification program (ServSafe); unique career-building high school program (the NRAEF’s ProStart); as well as the Kids LiveWell program promoting healthful kids’ menu options.