August 29, 2005

RPI Slips in July

The National Restaurant Association’s Restaurant Performance Index fell by 0.4% in July to 101.7. A reading of more than 100 indicates economic expansion in the restaurant industry.

The Current Situation Index fell by 0.3% to 101.0 in July. Surveyed operators’ customer traffic results and same-store sales fell in July vs. June. Approximately 54% of respondents said that their July same-store sales increased vs. the same period a year earlier, compared to 58% who made that claim in June. The percentage of operators who reported a decline in same-store sales held steady in July at 30%.

Not surprisingly, customer traffic also fell during the month, with 40% of operators reporting an increase in year-over-year traffic, vs. 44% who reported an increase in June.

The Expectations Index also dipped in the latest survey, falling by 0.4% to 102.2. Some 53% of those surveyed said they expect their sales volume in six months to be higher than the corresponding period a year earlier, down 2% from the last survey. The study showed, however, that the percentage of operators who expect higher sales in six months increased by 2%.

Operator capital expenditure plans weakened in the most recent study, as well, with 59% planning to make an expenditure on equipment, expansion or remodeling in the next six months, down from 61% in the previous study.

The index is based upon a survey of U.S. foodservice operators and consists of two portions: the Current Situation Index and the Expectations Index, both of which fell in the most recent survey.

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