Restaurant Performance Index slide continues
by Keith Nunes
WASHINGTON — The National Restaurant Association’s Restaurant Performance Index continued to slide in August as it fell to 100.5, down 0.2% compared with July’s level of 100.7.
“The August decline in the R.P.I. 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 N.R.A. “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.”
The R.P.I. consists of two parts, a current situation index and an expectations index. The current situation index was 100.7 in August, an increase of 0.6% compared with July. A majority of restaurant operators surveyed for the R.P.I. reported positive same-store sales in August, and the overall results were an improvement over July’s performance. Fifty-three per cent of restaurant operators reported a same-store sales gain between August 2012 and August 2013, up from 44% who reported higher sales in July. In comparison, 33% of operators reported a decline in same-store sales in August, down slightly from 36% in July.
Restaurant operators also reported stronger customer traffic levels in August. Forty-five per cent of restaurant operators reported higher customer traffic levels between August 2012 and August 2013, up from 35% who reported a traffic gain in July. Thirty-eight per cent of operators reported a decline in customer traffic in August, down from 43% in July.
The expectations index was another story as it fell 0.9% compared with July to 100.4 in August. It was the expectations index’s lowest level in eight months.
Restaurant operators are less optimistic about sales growth in the coming months. Thirty-six per cent expect to have higher sales in six months (compared to the same period in the previous year), down slightly from 37% last month and the lowest level in 10 months. Sixteen per cent of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year, up from 9% last month and the highest level in seven months.
Restaurant operators are also less bullish about the economy. Twenty-three per cent said they expect economic conditions to improve in six months, unchanged from last month. However, 22% of operators said they expect economic conditions to worsen in the next six months, up from 18% last month and the highest level in eight months.