Restaurant index declines again in August
Sept. 30, 2011
WASHINGTON — The Restaurant Performance Index fell for a second consecutive month and stood at 99.4 in August, according to the National Restaurant Association.
The decline was the result of softer sales and traffic levels and uncertainty among restaurant operators.
“The August decline in the Restaurant Performance Index resulted from the 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 N.R.A. “Although restaurant operators reported positive same-store sales results in August, their six-month outlook for both sales growth and the economy continued to deteriorate.”
Restaurants did have positive same-stores sales in August, but the results were softer than recent months with 45% of operators reporting a same-store sales gain during the year while 37% of operators reported lower same-stores sales. In July, 48% of operators had higher same-stores sales and 34% reported a sales decline.
Operators also reported a net decline in customer traffic for the first time in three months with 34% of operators reporting an increase in customer traffic during the year, down from 40% of operators who reported higher traffic in July. Operators also said 42% experienced a traffic decline in August, up from 37% who had lower traffic in July.
The expectations index was at 99.5 in August, down 0.1% from July and the lowest level in nearly two years.
Operators’ outlook for sales growth in coming months also is deteriorating, with 33% of operators expecting to have higher sales in six months, down from 39% last month and the lowest level in 19 months. In addition, 23% of operators expect their sales volume in six months to be lower than it was during the same period of the previous year. Pessimism also remains when it comes to operators opinions about the direction of the economy. Only 18% of operators said they expect economic conditions to improve and 31% said they expect conditions to worsen.