NRA’s Performance Index Softens Again As Expectations Sag

Expectations are everything, especially when it comes to capital spending. And unfortunately, foodservice operators’ outlook for the next six months fell for the third straight month in the June Restaurant Performance Index survey fielded by the National Restaurant Association. Both indicators tracking capital spending also declined.

All four components of the Expectations Index fell, dragging the overall RPI down to 99.5. It was the second month the index has been below the 100 point that separates expansion from contraction. The index had risen above the 100 point in March and April for the first time since November 2007.

The percentage of operators who expect better conditions in six months has fallen from 46% in April to only 28% in June. This led to a full point decline in the business conditions component to 100.7. It was at 103.4 in March. The components for future same-store sales and staffing also fell.

The Current Situation Index actually rose 0.1 point, to 98.8. The indicator for current same-store sales rose 0.7 point and the traffic market was flat; the labor indicator also rose.

The measure tracking operators who made a capital purchase during the past three months fell 0.5 point to 98.5. The percentage of operators who made such a purchase dropped to 43% from 45% last month. The cap-ex marker in the Expectation Index, a measure of those who plan a purchase in the next six months, fell 0.8 point to 98.3. Forty-one percent of operators indicated such an intention, down from 46% in May.