Restaurant Performance Index drops again

Sept. 29, 2011

Less than one out of five restaurant operators expect economic conditions to improve in the next six months, according to the National Restaurant Association. Its Restaurant Performance Index (RPI) declined for the second consecutive month in August. The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 99.4 in August, down 0.3 percent from July. In addition, August marked the second consecutive month that the RPI stood below 100, the level above which signifies expansion in the index of key industry indicators.

"The August decline in the Restaurant Performance Index resulted from softening of both current situation and expectations indicators, as well as Hurricane Irene," said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. "Although restaurant operators reported net positive same-store sales results in August, their six-month outlook for both sales growth and the economy continued to deteriorate."

It's important to note, however, that the industry's August performance is a substantial improvement over the 2008-2009 period, Riehle said. "Overall, the near-term health of the restaurant industry will depend heavily on the economy's ability to create jobs and bolster consumer confidence."

Forty-five percent of restaurant operators reported a same-store sales gain between August 2010 and August 2011, while 37 percent of operators reported lower same-store sales. In July, 48 percent of operators reported higher same-store sales, while 34 percent reported a sales decline.

Meanwhile, restaurant operators reported a net decline in customer traffic for the first time in three months. Thirty-four percent of restaurant operators reported an increase in customer traffic between August 2010 and August 2011, down from 40 percent of operators who reported higher traffic in July. In comparison, 42 percent of operators reported a traffic decline in August, up from 37 percent who reported lower traffic in July.

Overall, restaurant operators reported relatively steady levels of capital spending. Forty-four percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, roughly on par with 43 percent who reported similarly last month.

Read more about trends.

Topics: Trends / Statistics

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