Foodservice Equipment Reports

RPI Falls A Point, Dips Below 100

Declines in both same-store sales and customer traffic pushed the NRA’s Restaurant Performance Index below 100 in August. The RPI stood at 99.6, down 1.0 point from its July level of 100.6. It’s the first time the RPI has fallen below 100 in eight months.

“Restaurant operators reported soft sales and traffic in August, along with corresponding dips in the labor indicators,” says Hudson Riehle, senior v.p.-research for the association. “While the Expectations component of the index remains in expansion territory, it too has trended downward in the past several months.”

The RPI’s Current Situation Index stood at 98.6 in August, down 1.9 point from a level of 100.4 in July. The August reading represented the lowest value since February 2013. After three consecutive months of mixed results, same-store sales reports took a downward turn. Only 30% of restaurant operators reported a same-store sales increase between August 2015 and August 2016, while 53% said they saw a sales decline.

Similarly, operators reported a net decline in customer traffic, with only 21% reporting an increase in customer traffic between August 2015 and August 2016; 59% reported a decline in traffic. August is the fourth consecutive month in which restaurant operators reported a net decline in customer traffic.

Despite these softer results, operators continued to report positive capital spending activity; 56% of restaurant operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months. Looking ahead, 62% plan on making capital expenditures six months out, a positive vibe on an otherwise lukewarm Expectations Index measuring operators’ six-month outlook. That Index stood at 100.6 in August, down slightly from a level of 100.8 in July. Only a third expect to have higher sales in six months, while 18% foresee their sales to be lower. About the same number of operators, 17%, said they expect overall economic conditions to improve in six months.

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