Restaurant performance edges down in August

Oct 4, 2013
by WLJ

Due to a softer outlook among restaurant operators for sales growth and the economy, the National Restaurant Association’s Restaurant Performance Index (RPI) declined for the third consecutive month.

The RPI stood at 100.5, down 0.2 percent from July’s level of 100.7. Despite the recent declines, the RPI remained above 100 for the sixth consecutive month, which signifies expansion in the index of key industry indicators.

“The August decline in the RPI was due almost entirely to a dip in the expectations indicators, with restaurant operators becoming less bullish about sales growth and the economy in the months ahead,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association.

“In contrast, operators reported positive same-store sales and customer traffic levels in August, and a majority of operators reported capital expenditures for the fourth consecutive month,” Riehle added.

The RPI consists of two components—the Current Situation Index (measuring current trends) and the Expectations Index (measuring restaurant operators’ six-month outlook)—and tracks the health of and outlook for the U.S. restaurant industry.

The Current Situation Index stood at 100.7 in August— up 0.6 percent from July and the first increase in three months. In addition, the Current Situation Index stood above 100 for the fifth consecutive month, which signifies expansion in the current situation indicators. A majority of restaurant operators reported positive same-store sales in August, and the overall results were an improvement over July’s performance.

Restaurant operators also reported stronger customer traffic levels in August.

The Expectations Index stood at 100.4 in August— down 0.9 percent from July and the lowest level in eight months. Although an Expectations Index above 100 continues to suggest that operators are generally positive about business conditions in the months ahead, their optimism is somewhat dampened compared to recent months. — WLJ