Restaurant Performance Index Declined In December As Sales And Traffic Levels Softened
Same-store sales and customer traffic softened; Restaurant operators remain pessimistic about the economy
WASHINGTON, Jan. 31, 2013 /PRNewswire-USNewswire/ -- Due in large part to softer same-store sales and customer traffic levels, the National Restaurant Association's Restaurant Performance Index (RPI) declined in December. The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 99.7 in December, down 0.2 percent from November. In addition, December marked the third consecutive month in which the RPI stood below 100, which signifies contraction in the index of key industry indicators.
"Although restaurant operators reported softer same-store sales and customer traffic levels in December, they are cautiously optimistic about sales growth in the months ahead," said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. "However, operators remain decidedly pessimistic about the overall economy, with only 17 percent saying they expect business conditions to improve in the next six months."
The RPI 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. The Index consists of two components – the Current Situation Index and the Expectations Index.The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 99.1 in December – down 0.7 percent from November and the lowest level in nearly two years. December represented the fourth consecutive month in which the Current Situation Index stood below 100, which signifies contraction in the current situation indicators. Although restaurant operators reported net positive same-store sales for the 19th consecutive month, December's results were much softer than the November performance. Forty-two percent of restaurant operators reported a same-store sales gain between December 2011 and December 2012, down from 55 percent who reported positive sales in November. In comparison, 38 percent of operators reported lower same-store sales in December, up from 30 percent in November. While overall sales remained positive, restaurant operators reported a net decline in customer traffic levels in December. Thirty-one percent of restaurant operators reported higher customer traffic levels between December 2011 and December 2012, down from 43 percent who reported positive traffic in November. Meanwhile, 48 percent of operators reported lower customer traffic levels in December, up from 35 percent in November. Although sales and traffic results softened, restaurant operators reported an uptick in capital spending, with 45 percent of operators saying they made a capital expenditure for equipment, expansion or remodeling during the last three months.
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