News
NRA: Restaurant industry outlook up slightly in January
March 1, 2009
WASHINGTON, D.C. — The outlook for the restaurant industry improved somewhat in January, as theNational Restaurant Association's comprehensive index of restaurant activity bounced back from December's record low. The Association's Restaurant Performance Index (RPI) — a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry — stood at 97.4 in January, up 1.0 percent from December's record low level of 96.4.
"Despite the encouraging January gain, the RPI remained below 100 for the 15th consecutive month, which signifies contraction in the key industry indicators," said Hudson Riehle, senior vice president of research and information services for the association. "Same-store sales and customer traffic remained negative in January, and only one out of four operators expect to have stronger sales in six months.
"The economy remains the number-one challenge from the perspective of restaurant operators," iehle added. "Forty-five percent of restaurant operators said the economy is the top challenge facing their business, while 24 percent said the same about building-and-maintaining sales volume."
The RPI is based on the responses to the NRA'sRestaurant Industry Tracking Survey, which is fielded monthly among restaurant operators nationwide on a variety of indicators including sales, traffic, labor and capital expenditures. The RPI consists of two components — the Current Situation Index and the Expectations Index.
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 Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 96.5 in January — up 0.8 percent from December's record low. Despite the moderate increase, January marked the 17th consecutive month below 100, which signifies contraction in the current situation component.
- Thirty-one percent of restaurant operators reported a same-store sales gain between January 2008 and January 2009, up from 23 percent who reported a sales gain in December.
- Fifty-five percent of operators reported a same-store sales decline in January, down from 66 who reported negative sales in December.
Restaurant operators reported negative customer traffic levels for the 17th consecutive month in January:
- Twenty-two percent of restaurant operators reported an increase in customer traffic between January 2008 and January 2009, up from 16 percent who reported similarly in December.
- Fifty-nine percent of operators reported a traffic decline in January, down from 68 percent who reported negative traffic in December.
Along with soft sales and traffic levels, capital spending activity remained dampened in recent months. Thirty-four percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, matching the proportion who reported similarly last month and tied for the lowest level on record.
Expectations Index
- Twenty-six percent of restaurant operators expect to have higher sales in six months (compared to the same period in the previous year), up from 18 percent who reported similarly last month.
- Forty-two percent of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year, down from 48 percent who reported similarly last month.
Restaurant operators also remain uncertain about the direction of the economy:
- Eighteen percent of operators expect economic conditions to improve in six months, a level which has remained relatively unchanged for the last four months.
- Thirty-four percent of operators said they expect economic conditions to worsen in six months, while 48 percent expect economic conditions in six months to be about the same as they are now.
Related Media
Subscribe
Get the latest news and resources from Fast Casual.
Recent Posts
