NRA’s Performance Index Fell In July, But Hangs Above Expansion Line

Declines in six of the eight components of the National Restaurant Association’s Restaurant Performance Index pushed the overall index down for the second consecutive month in July. The RPI fell 0.6 point to 100.7. But the index remained above the 100 level, indicating the industry continued to expand for the fifth month in a row. One marker tracking capital spending plans fell while the other, an indicator of spending the past three months, rose sharply.

Both the Current Situation and Expectations Indexes also declined 0.6 point, to 100.1 and 101.3 respectively. Current same-store sales fell one point while the component tracking customer traffic was down 1.2 points. The labor index was off 1.5 points. The traffic and labor indices fell below the 100 tipping point. In May and June’s results, all eight RPI components were above 100 for the first time in six years.

In the Expectations Index, the six-month outlook for same-store sales was off 0.7 point, the indicator for future business conditions fell 0.9 point, while the marker tracking the staffing outlook rose 0.2 point.

The current capital spending indicator, a measure of cap-ex activity during the past three months, was up a strong 1.3 point to 101.6, with 58% of those surveyed saying they bought equipment or renovated facilities in the period. It’s the highest reading for the Current Situation cap-ex measure since the Great Foodservice Recession began in 2007. But the marker that tracks plans to buy equipment and other capital goods fell 1.2 points, though it remained above the expansion-contraction delineator at 100.6. The percentage of operators planning a capital buy fell to 53% in July, down from 59% in June.

The entire RPI report is available at NRA’s website at restaurant.org.”””