Restaurant recovery in holding pattern, RPI reveals

 
Sept. 29, 2010

The National Restaurant Association's comprehensive index of restaurant activity remained below 100 for the fourth consecutive month in August, dashing hopes operators’ hard work has paid off in the ebbing recession.

The Association’s Restaurant Performance Index (RPI) – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 99.5 in August, essentially unchanged from the previous three months. Additionally, the RPI stood below 100 for the fourth consecutive month, which signifies contraction in the index of key industry indicators.

Many of the indicators are almost identical to those reported last month for July. Highlights include:

  • Restaurant operators reported a net decline in same-store sales for the fifth consecutive month in August, with results almost identical to the previous two months: Thirty-eight percent of restaurant operators reported a same-store sales gain between August 2009 and August 2010, compared with 39 percent of operators who reported higher sales in both June and July. Meanwhile, 43 percent of operators reported a same-store sales decline in August, compared with 44 percent of operators who reported negative sales in July.
  • Restaurant operators also continued to report a net decline in customer traffic levels in August. Thirty-five percent of restaurant operators reported an increase in customer traffic between August 2009 and August 2010, matching the proportion of operators who reported higher customer traffic in July. Forty-two percent of operators reported a traffic decline in August, down slightly from 46 percent who reported lower traffic in July.
  • Twenty-five percent of restaurant operators said they expect overall economic conditions to improve in six months, down slightly from 26 percent who reported similarly last month and the lowest level in 18 months. In comparison, 21 percent of operators said they expect economic conditions to worsen in the next six months, matching the proportion who reported similarly last month.

Although their economic outlook softened in recent months, restaurant operators are holding relatively steady on plans for capital expenditures. Forty-two percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, compared with 43 percent who reported similarly last month.


Topics: Business Strategy and Profitability , Trends / Statistics


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