WASHINGTON — The National Restaurant Association’s Restaurant Performance Index was at 99.7 in July, down from 100.6 in June and at the lowest level in 11 months.
“Although same-store sales and customer traffic levels remained positive in July, restaurant operators’ outlook for the economy took a pessimistic turn,” said Hudson Riehle, senior vice-president of the research and knowledge group for the association. “This survey month was burdened with the debt ceiling crisis and the downgrade in the nation’s credit rating, which added an additional layer of uncertainty in an already fragile economic recovery.
“However, if the economy can avoid additional negative shocks in months ahead, the overall fundamentals continue to point toward growth in the second half of the year.”
Restaurant operators reported softer same-store sales in July with 48% of operators reporting a gain compared with the previous year, down from 51% who reported higher same-store sales in June. Also, 34% of operators had same-store sales decline in July, up from 31% of operators who had lower same-store sales in June.
There was also overall softer traffic in July with 40% of operators seeing an increase in customer traffic compared with the previous year, down from 44% who reported higher traffic in June, while 37% of operators reported a traffic decline in July, up from 33% who reported the same in June.
Restaurant operators are optimistic about sales growth in coming months with 39% of operators expecting higher sales in six months, nearly unchanged from the previous month. Yet 23% of operators expect sales volume in six months to be lower than it was during the same period of the previous year, up from 16% who said the same thing in June.
Restaurant operators are not very optimistic about the direction of the overall economy, with just 17% of operators saying they expect economic conditions to improve in six months, down from 26% who reported optimism in June. Additionally, 31% of operators said they expect economic conditions to decline in the next six months, up from 20% who said the same in June.