CHICAGO – The Restaurant Performance Index (RPI) retreated 1.2 percent in August on soft same-store sales and customer traffic levels, the National Restaurant Association reported. The index stood at 101.5 for August, the lowest level in 11 months. However, August represented the 30th consecutive month in which the RPI remained above 100. Index values above 100 indicate expansion of key industry indicators, the NRA 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 RPI reported for August, according to the association. The index stood at 101.4, a decline of 2.3 percent from July and the lowest level since November 2014.
“The RPI’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,” Riehle added.
Fifty-six percent of foodservice operators reported same-store sales gain between August 2014 and August 2015, down from 73 percent of foodservice operators reporting higher same-store sales in July. Meanwhile, 32 percent of foodservice operators reported same-store sales declines in August, up from 16 percent in July.
On customer traffic, 41 percent of foodservice operators reported higher customer traffic, down from 59 percent who reported an increase in customer traffic in July. Thirty-seven percent of foodservice operators reported declines in customer traffic, up from 23 percent in July.
But despite declines in customer traffic and same-store sales, capital spending remained strong, NRA reported. Sixty-three percent of foodservice 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 foodservice operators reported making a capital expenditure, NRA noted.
The Expectations Index declined slightly in August. The index measures foodservice 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 NRA found 44 percent of foodservice operators expect higher sales in the next six months, while 12 percent of operators expect sales volumes to be lower in the next six months compared to a year ago. Another 44 percent expect their sales volumes to be flat.
Foodservice operators are much less optimistic about the overall economy. Only 22 percent of operators said they expect economic conditions to improve over the next six months, while 12 percent expect conditions to worsen.
But despite the mixed outlook, most foodservice operators (60 percent) expect to make a capital expenditure for equipment, expansion or remodeling in the next six months. Sixty-six percent of operators reported similarly in July.