Restaurant Performance Index falls to record low
January 05, 2009
by MEAT&POULTRY Staff
WASHINGTON — In November, the outlook for the restaurant industry worsened, as the National Restaurant Association’s comprehensive index of restaurant activity fell to a record-low level. The association’s Restaurant Performance Index (RPI) – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 96.7 in November, down 0.4% from October and its 13th consecutive month below 100.
The November decline in the Restaurant Performance Index was the result of broad-based declines across the index components, with the Current Situation index falling to a new record low, said Hudson Riehle, senior vice president of Research and Information Services for the association. A solid majority of restaurant operators reported negative same-store sales and traffic levels in November, while nearly one-half expect their sales in six months to be lower than the same period in the previous year.
"The continued deterioration in economic conditions is reflected in operator sentiment, with a record 47% of restaurant operators saying the economy is currently the number-one challenge facing their business," Mr. Riehle said. "Looking forward, restaurant operators aren’t particularly optimistic about an improvement either, with 49% expecting economic conditions to worsen in six months."
The Restaurant Performance Index is based on the responses to the National Restaurant Association’s Restaurant Industry Tracking Survey, which is fielded monthly among restaurant operators nationwide on a variety of indicators including sales, traffic, labor and capital expenditures. The Index consists of two components – the Current Situation Index and the Expectations Index. (Follow this link to view this month's report: www.restaurant.org/pdfs/research/index/200811.pdf).
The Restaurant Performance Index is constructed so that the health of the restaurant industry is measured in relation to a steady-state level of 100. Index values above 100 indicate that key industry indicators are in a period of expansion, while index values below 100 represent a period of contraction for key industry indicators.
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