As a result of soft sales, lower traffic levels and a deteriorating outlook among restaurant operators, the National Restaurant Association’s comprehensive index of restaurant activity remained essentially flat in July.
The Association’s RPI—a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry—stood at 99.4 in July, down 0.1 percent from June and its fourth consecutive decline. In addition, the RPI stood below 100 for the third consecutive month, which signifies contraction in the index of key industry indicators.
“While there were signs in recent months that the short-term outlook may be improving, the latest figures indicate that the restaurant industry’s recovery has yet to fully gain traction,” said Hudson Riehle, senior vice president of the NRA’s Research and Knowledge Group. “Restaurant operators continued to report declines in same-store sales and customer traffic in July, and their previously optimistic outlook for sales growth and the economy softened in recent months.”
- 44% of operators reported a same-store sales decline in July, compared to 43% who reported negative sales in June
- 46% of operators reported a traffic decline in July, up from 43% who reported lower traffic in June
- Restaurant operators have become less optimistic about their prospects for sales growth in recent months. Only 38% expect to have higher sales in six months (compared to the same period in the previous year), down from 42% last month
- Operators are also much less bullish about the direction of the overall economy. 26% said they expect economic conditions to improve in six months, down from 28% who reported similarly last month; the lowest level in 13 months
- Despite the deteriorating outlook, 43% of operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, up slightly from 41% who reported similarly in June
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