Oct. 31, 2013
As a result of softer sales and traffic levels and restaurant operators' dampened outlook for the economy, the National Restaurant Association's Restaurant Performance Index declined for the fourth consecutive month. The RPI — a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry — stood at 100.2 in September, down 0.3 percent from a level of 100.5 in August.
Despite the recent declines, however, the RPI remained above 100 for the seventh consecutive month, which signifies expansion in the index of key industry indicators.
"The RPI's September decline was due in large part to softer same-store sales and customer traffic readings, which were down from stronger levels in August," said Hudson Riehle, senior vice president of the Research and Knowledge Group for the NRA. "In addition, operators' confidence in the economy continued to deteriorate, which was likely due to the fact that the government shutdown and debt ceiling debates occurred during the midst of the survey's October fielding period."
Current Situation Index
The Current Situation Index, which measures current trends in same-store sales, traffic, labor and capital expenditures, stood at 99.9 in September — down 0.7 percent from a level of 100.7 in August. September marked the first time in six months that the Current Situation Index fell below 100.
Operators reported softer same-store sales results in September. Forty-one percent reported a same-store sales gain between September 2012 and September 2013, down from 53 percent who reported higher sales in August. In comparison, 40 percent of operators reported a decline in same-store sales in September, up from 33 percent in August.
Operators also reported a dip in customer traffic levels in September. Thirty-three percent reported higher customer traffic levels between September 2012 and September 2013, down from 45 percent who reported a traffic gain in August. Meanwhile, 44 percent reported a decline in customer traffic in September, up from 38 percent in August.
Although sales and traffic levels softened, operators continued to report positive capital spending levels. Fifty-seven percent said they made a capital expenditure for equipment, expansion or remodeling during the last three months, the fifth consecutive month in which a majority of operators reported expenditures.
The Expectations Index stood at 100.5 in September — up slightly from a level of 100.4 in August. Although September represented the 11th consecutive month in which the Expectations Index stood above 100, operators are not as bullish as they were during the first half of the year.
Respondents' outlook for sales growth in the months ahead remains relatively cautious. Thirty-four percent expect to have higher sales in six months (compared to the same period in the previous year), down slightly from 36 percent last month and the lowest level in 11 months. Meanwhile, 13 percent expect their sales volume in six months to be lower than it was during the same period in the previous year, compared to 16 percent last month.
Restaurant operators are also less optimistic about the direction of the economy: 19 percent said they expect economic conditions to improve in six months, down from 23 percent last month. Meanwhile, 28 percent said they expect economic conditions to worsen in the next six months, up from 22 percent last month and the highest level in nine months.
Despite an uncertain outlook for the economy, a majority — 52 percent — are planning for capital expenditures in the months ahead for equipment, expansion or remodeling. This is up from 45 percent who reported similarly the month prior.
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