CHICAGO — The Restaurant Performance Index (R.P.I.) retreated 1.2% in August on soft same-store sales and customer traffic levels, the National Restaurant Association said. The index stood at 101.5 for August, the lowest level in 11 months. However, August represented the 30th consecutive month in which the R.P.I. remained above 100. Index values above 100 indicate expansion of key industry indicators, the N.R.A. explained.
The index consists of the Current Situation Index and the Expectations Index. Broad declines across the Current Situation Index also contributed to a lower R.P.I. reported for August, according to the association. The index stood at 101.4, a decline of 2.3% from July and the lowest level since November 2014.
“The R.P.I.’s August decline was the result of broad-based declines in the current situation indicators,” said Hudson Riehle, senior vice-president, Research and Knowledge Group. “Same-store sales and customer traffic softened from July’s strong levels, while the labor and capital spending indicators also dipped.
“Despite the declines, each of the current situation indicators were in expansion territory above 100, which indicates the restaurant industry remains on a positive growth trajectory,” Mr. Riehle added.
Fifty-six per cent of food service operators reported same-store sales gain between August 2014 and August 2015, down from 73% of food service operators reporting higher same-store sales in July. Meanwhile, 32% of food service operators reported same-store sales declines in August, up from 16% in July.
On customer traffic, 41% of food service operators reported higher customer traffic, down from 59% who reported an increase in customer traffic in July. Thirty-seven per cent of food service operators reported declines in customer traffic, up from 23% in July.
But despite declines in customer traffic and same-store sales, capital spending remained strong, the N.R.A. said. Sixty-three per cent of food service operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, which is the 11th consecutive month in which a majority of food service operators reported making a capital expenditure, N.R.A. noted.
The Expectations Index declined slightly in August. The index measures food service operators’ six-month outlook for same-store sales, employees, capital expenditures and business conditions. Generally, operators have an optimistic outlook for sales in the next six months. The N.R.A. found 44% of food service operators expect higher sales in the next six months, while 12% of operators expect sales volumes to be lower in the next six months compared to a year ago. Another 44% expect their sales volumes to be flat.
Food service operators are much less optimistic about the overall economy. Only 22% of operators said they expect economic conditions to improve over the next six months, while 12% expect conditions to worsen.But despite the mixed outlook, most food service operators (60%) expect to make a capital expenditure for equipment, expansion or remodeling in the next six months. Sixty-six per cent of operators reported similarly in July.