Restaurant Performance Index slips to 11 month low
Sept. 1, 2011
by Meat&Poultry Staff
WASHINGTON – For July, the National Restaurant Association’s Restaurant Performance Index was 99.7, down from 100.6 in June and marking the lowest RPI 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,” he added.
Softer same-store sales were reported in July by restaurant operators with 48 percent reporting a gain compared with the previous year, down from 51 percent who reported higher same-store sales in June. Thirty-four percent of operators had same-store sales decline in July, up from 31 percent of operators who had lower same-store sales in June.
July experienced overall softer traffic with 40 percent of operators seeing an increase in customer traffic compared with the previous year, down from 44 percent who reported higher traffic in June., Thirty-seven percent of operators reported a traffic decline in July, up from 33 percent who reported the same in June.
However, restaurant operators indicate they are optimistic about sales growth in coming months with 39 percent of operators expecting higher sales in six months, nearly unchanged from the previous month. Yet, 23 percent 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 percent who said the same thing in June.
Restaurant operators are not very optimistic about the direction of the overall economy, with just 17 percent of operators saying they expect economic conditions to improve in six months, down from 26 percent who reported optimism in June. Thirty-one percent of operators said they expect economic conditions to decline in the next six months, up from 20 percent who said the same in June.