Expectations Fall, But NRA’s Performance Index Remains Positive

All four expectations indicators in the National Restaurant Association’s Restaurant Performance Index were down sharply in the August survey, including plans for capital spending. Still, gains in current same-store sales and traffic kept the decline of the overall RPI to just 0.2 point, to100.5. Any reading above 100 indicates expansion. The index has now been positive for six consecutive quarters.

The Current Situation Index rose 0.6 point to 100.7 as current same-store sales and customer traffic posted robust increases of 1.3 and 1.5 points, respectively. The labor indicator was also higher, up 0.3 point.

The Expectations Index fell 0.9 point though it remained positive at 100.4. The six-month outlook for same-store sales fell 0.8 point, that for staffing one full point, and expectations for future business conditions 0.5 point. All remain above the 100 tipping point, however.

The indicator tracking plans to make a capital buy in the next six months fell 1.5 point, with the percentage of surveyed operators planning a purchase falling to 45% from 53% in July. It was the first time since spring when fewer than half of operators expected to make a capital purchase. The change dropped the indicator below 100 to 99.1.

The marker tracking operators who made a capital purchase in the last three months also fell, down 0.9 point to 100.7. But a majority of operators, 53%, said they made a purchase in the past three months.

With the ongoing budget and debt-ceiling fights raging in Washington, we can probably expect continuing deterioration of operators’ outlook over the next few months. The complete RPI is available at restaurant.org. 

“””