The National Restaurant Association (Washington, D.C.) announced its Restaurant Performance Index (RPI) – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – was 98.3 in May, a decline of 0.3 percent from April and the 19th consecutive month below 100.
"The decline was the result of restaurant operators' dampened outlook for each of the four forward-looking indicators," says Hudson Riehle, senior vp of research and information services for the association. "Although restaurant operators remain relatively optimistic that economic conditions will improve in six months, their outlook for sales growth and capital spending activity softened somewhat."
The RPI is based on responses to the association's Restaurant Industry Tracking Survey, which is fielded monthly among restaurant operators nationwide. 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.
The Current Situation Index, which measures current trends in same-store sales, traffic, labor and capital expenditures, stood at 96.9 in May – down 0.1 percent from April. Twenty-six percent of restaurant operators reported a same-store sales gain between May 2008 and May 2009, while 60 percent reported a decline in May. Restaurant operators also announced the 21st consecutive month of traffic declines with 22 percent reporting an increase compared to 59 percent who saw a traffic decline in May.
The report shows capital spending activity remained relatively steady, despite the continued soft sales and traffic levels. Forty-one percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months.
Despite the softer sales outlook, 34 percent of restaurant operators say they expect economic conditions to improve in six months.