Restaurant operators remain generally optimistic about sales growth and the economy in the months ahead
WASHINGTON, March 29, 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) slipped below 100 in February. The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 99.9 in February, down 0.8 percent from January's five-month high. February represented the fourth time in the last five months that the RPI stood below 100, which signifies contraction in the index of key industry indicators.
"The Restaurant Performance Index decline was due largely to softer sales and traffic results, which fell in February amid higher gas prices and the impact of the payroll tax hike," said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. "In addition, sales and traffic comparisons were more difficult due to the extra day in February 2012 as a result of Leap Year."
"Despite the sales and traffic declines in February, restaurant operators remain generally optimistic about business conditions in the months ahead, which suggests they feel the setbacks will be temporary," Riehle added.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 98.3 in February – down 1.4 percent from January's level. In addition, the Current Situation Index stood below 100 for the 6 th consecutive month, which signifies contraction in the current situation indicators. With sales comparisons more difficult in February due to Leap Year in 2012, restaurant operators reported a same-store sales decline for the first time in 21 months. Thirty-three percent of restaurant operators reported a same-store sales gain between February 2012 and February 2013, while 48 percent of operators reported lower sales. In January, 44 percent of operators reported higher same-store sales, while 37 percent reported a sales decline. Restaurant operators also reported a decline in customer traffic levels in February. Twenty-four percent of restaurant operators reported higher customer traffic levels between February 2012 and February 2013, while 53 percent of operators said their traffic declined. In January, 33 percent of operators reported an increase in customer traffic, while 40 percent reported lower traffic levels. Capital spending activity also dipped along with the sales and traffic results. Forty-eight percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, down from 52 percent who reported similarly last month.