Restaurant Operators Not Optimistic About the Six Months Ahead

After months of optimism, it appears that restaurant operators are beginning to waver in their belief that the restaurant industry will experience an economic rebirth in the next six months.  June marked the third straight month that the National Restaurant Association’s Restaurant Performance Index (RPI) declined.  The RPI, which is released monthly, tracks the health and projected outlook of the U.S. restaurant industry.

June saw the RPI fall to 99.5, down 0.3 from May.  It was the lowest the RPI has been since February.  The RPI is based on a 100-point scale, with 100 being the point of stability.  June was the second consecutive month the index was below 100, signaling contraction in the industry. 

The Current Situation Index, which measures the current trends based on four main categories, ticked up slightly to 98.8, up 0.1 from May.  The rating was still below 100, meaning contraction was prevalent in the industry for the 34th consecutive month.

A net decline was reported in same-store sales for the third consecutive month, as well as a net decline in customer traffic.  Operators also reported spending less on capital, opting to forgo purchasing new equipment or making renovations at the current time. 

Maybe the most discouraging aspect of the reporting was the six-month outlook from restaurant operators.  In June, only 28% expected the economic conditions to improve over the next six months, down 5% from May, and the lowest the level has been in seven months.  Worse, 21% of operators said they expect the conditions to get worse over the next six months, up a whopping 11% from just two months ago.

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