Restaurant Performance Index fell to lowest level in 14 months ...

Due in large part to restaurant operators? dampened outlook for sales growth and the economy, the Restaurant Performance Index (RPI) fell sharply in October.? The RPI ? a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry ? stood at 99.5 in October, down 0.9 percent from September.?

?Although restaurant operators overall continued to report positive same-store sales in October, their short-term outlook for sales growth and the economy is decidedly more pessimistic,? said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association.? ?Nearly two out of five restaurant operators expect business conditions to worsen in the next six months, which is double the proportion that expect conditions to improve.?

The RPI consists of two components - the Current Situation Index (measuring current trends) and the Expectations Index (measuring restaurant operators' six-month outlook) - and tracks the health of and outlook for the U.S. restaurant industry.

The Current Situation Index stood at 99.3 in October ? down 0.6 percent from a level of 99.9 in September.? While same-store sales remained positive in October, declines in the labor and customer traffic indicators outweighed the performance, which resulted in a Current Situation Index reading below 100 for the third time in the last four months.?

The Expectations Index stood at 99.7 in October ? down 1.2 percent from September.? October represented the first time in 14 months that the Expectations Index fell below 100, which represents a pessimistic six-month outlook for the four industry indicators.??????

Restaurant operators? outlook for sales growth deteriorated significantly in recent months.? Thirty-one percent of restaurant operators expect to have higher sales in six months (compared to the same period in the previous year), down from 45 percent last month and the lowest level in three years.? Meanwhile, 21 percent of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year, up from 11 percent last month. Similarly, restaurant operators are increasingly pessimistic about the direction of the overall economy.?

For additional details, see our news release, full RPI report, and subscription-based Restaurant TrendMapper.

Source: http://www.restaurant.org/nra_news_blog/2012/11/restaurant-performance-index-fell-to-lowest-level-in-14-months.cfm

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