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Restaurant sales, traffic and capital spending on the rise

BY Dan Berthiaume

Washington, D.C. — Driven by stronger same-store sales and customer traffic and a more optimistic outlook among restaurant operators, the National Restaurant Association’s Restaurant Performance Index ‘s rose to a 10-month high in March. The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 101.4 in March, up 0.9 percent from February’s level of 100.5.

In addition, the RPI remained above 100 for the 13th consecutive month, which signifies expansion in the index of key industry indicators.

"The solid March increase in the RPI was fueled by stronger sales and traffic levels, which bounced back from the weather-challenged results in recent months," said Hudson Riehle, senior VP of the research and knowledge group for the Association. "Looking forward, restaurant operators are increasingly optimistic about sales gains, and a majority plan to make capital expenditure in the next six months."

For the first time in four months, a majority of restaurant operators reported higher same-store sales. Fifty-five percent of restaurant operators reported a same-store sales gain between March 2013 and March 2014, up from 44% who reported higher sales in February.

Restaurant operators also reported stronger customer traffic levels in March. Forty-six percent of restaurant operators reported higher customer traffic levels between March 2013 and March 2014, up from 35% who reported a traffic gain in February. Meanwhile, 33% of operators reported a decline in customer traffic in March, down from 43% in February.

Along with stronger sales and customer traffic results, restaurant operators reported an uptick in capital spending activity. Forty-nine percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, up from 44% who reported similarly last month.

For the seventh consecutive month, a majority of restaurant operators are planning for capital expenditures in the near future. Fifty-eight percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, matching the proportion who reported similarly last month.

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Stock compensation drives Twitter Q1 net loss

BY Dan Berthiaume

San Francisco – Stock compensation expenses helped produce a net loss of $132.4 million at Twitter Inc. during the first quarter of 2014, compared to a net loss of $27 million in the same quarter of the previous year. Twitter attributed part of the net loss to $126 million in stock compensation expense.

Revenue more than doubled to $250.49 million from $115.34 million. For the second quarter, Twitter projected revenue of $270 to $280 million, and also projected revenue of $1.2 to $1.25 billion. Twitter CEO Dick Costolo cited growth in engagement and users as helping to boost revenue.

"We had a very strong first quarter,” said Costolo. “Revenue growth accelerated on a year over year basis fueled by increased engagement and user growth/ We also continue to rapidly increase our reach and scale. With the integration of MoPub, we now reach more than 1 billion iOS and Android users each month, making us one of the largest in-app mobile ad exchanges in the world and the only one at scale to offer native in-app advertising."

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Survey: Retailers getting more aggressive in mobile investments as payback grows

BY Marianne Wilson

Chicago — Mobile (including tablet), marketing and personalization were the top three issues that retailers will devote the most time to in 2014, according to the e-tailing group’s 13th Annual Merchant Survey. Omni-channel and platform rounded out the top five concerns.

"Amazon is nipping at the heels of every retailer. Mobile has materialized as a revenue producing force and customer expectations have peaked, once again altering retailer investment strategies. Choice and prioritization are paramount in the context of this chaotic environment for survival and growth," said Lauren Freedman, president, the e-tailing group, a Chicago-based consultancy.

The survey, fielded in the first quarter to senior executives with omni-channel responsibility, finds that retailers are getting more aggressive in their mobile investments with one in three spending in excess of $100K on mobile. According to the study, mobile accounts for at least 20% of traffic for the majority of retailers; for one-in-five, it is responsible for more than 30% of their business.

“The exciting news is that revenue derived from mobile results sees year over year gains, where 50% of retailers report at least a 5% contribution rate and 32% report at least 10%. The payback is powerful and mobile’s ability to fuel omni-channel access is unprecedented,” the report states.

On the contrary, social has not played out for the majority of retailers: They report receiving less than 2% of traffic from social networks.

In other key findings:

• Sixty-one percent of retailers acknowledge that they are in the early stages of working towards superior online experiences. This is despite the fact that 75% agree that their mobile effort is critical to the growth of the business.

• Three-out-of four retailers will make investments in the customer experience arena while half place an emphasis on technology and responsive design.

• Analytics were once again cited as the No. 1 merchandising tactic (97% rank important) for customer retention. Additionally, given data’s increasing role for maintaining parity in the competitive climate, one in two retailers are evaluating big data to impact marketing despite existing constraints.

• In merchandising tactics, sales/specials/outlets ranked as most valuable, followed by email as a merchandising vehicle, seasonal promotions, keyword search and cross-sells.

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