Foodservice Equipment Reports

Shucks! NRA’s Performance Index Fell Back In November

Just when it appeared the restaurant industry had finally turned the corner to recovery, the market softened again, according to the November reading from the National Restaurant Association’s Restaurant Performance Index. The overall index fell 0.8 point, to fall back to 99.9, just below the 100 level that separates expansion from contraction. The RPI stood at 100.3 in September and 100.7 in October. The two capital expenditure indicators were both off moderately.

The big drivers of the change were significant downward moves in current same-store sales and traffic. The sales marker fell 2.1 points and the customer-traffic indicator dropped 1.9 points. Both fell below 100 after two months above the tipping point. The four-component Current Situation Index was down 1.3 points to 98.7. It had finally hit 100 in October for the first time since the fall of 2007.

The four-component Expectations Index was off only 0.2 and remained above the tipping point at 101.2. The six-month outlooks for sales and staff fell 0.4. The expected business condition marker was flat.

The component measuring operators who made a capital purchase during the past three months fell 0.4 point, while the marker charting cap-ex purchase intentions during the next six was off 0.2 point. In the national survey on which the RPI is based, 40% of respondents said they made a cap-ex buy, and 47% said they will make a purchase. Both percentages were down slightly from the previous month.

It’s highly possible the RPI will measure another soft month in December, in spite of overall growth in retail sales around the holiday shopping season. Late-month rain and snow storms in the highly populated Northeast and California undoubtedly cut into sales and traffic.