October 10, 2005

Restaurant Index Declines in August

Citing the dampening effect two hurricanes and strong gas prices had on operator optimism, the National Restaurant Association announced its Restaurant Performance Index registered its second consecutive monthly decline in August. The August Restaurant Performance Index checked in at 100.4, down 1.2% from July’s 101.7. Despite the decline, the index remained above 100, a level that represents expansion in the association's composite index of eight key industry indicators.

The Restaurant Performance Index is based on the responses to the National Restaurant Asso-ciation's Restaurant Industry Tracking Survey, which is fielded monthly among restaurant opera-tors nationwide on a variety of indicators including sales, traffic, labor and capital expenditures. The index consists of two components: the Current Situation Index and the Expectations Index.

The outlook for capital expenditure activity slipped somewhat, as 51% of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, down from 59% who reported similarly last month.

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