Although the performance index calculated by the National Restaurant Association remained in the “expansion” range for September, 80% of restaurant operators expect economic conditions to remain the same or worsen during the coming six months.
The association’s Restaurant Performance Index (RPI) dropped almost 1% in September, according to a release from the association. However, because the RPI of 101 was above the benchmark 100 level, the industry’s key indicators remain in expansion mode, according to the release.
It was the 19th consecutive month for the RPI to remain above the 100 mark. The report consists of two components, the current situations index and the expectations index.
“The September decline in the RPI was due in large part to a dampened outlook among restaurant operators for business conditions in the months ahead,” Hudson Riehle, senior vice president of the association’s research and knowledge group, said in the release.
“Restaurant operators remain unimpressed about the direction of the economy, with elevated food costs remaining at the top of their list of challenges.”
The expectations index, which was 100.9 in September and 1.1% lower than it was in August, measures restaurant operators’ six-month outlook for four industry indicators. Those indicators and operators views on them include same-store sales, with 63% reporting gains and 23% reporting declines, and capital expenditures, with 53% planning these in the coming six months, down from 59%.
Restaurant operators reported less customer traffic in September, with 40% seeing an increase compared with September 2013 and 33% seeing lower customer traffic. In August, 45% reported more traffic, while 31% reported a decline, according to the news release.
The outlook for the economy remains mixed among restaurant operators with only 20% saying they expect improvement in six months. About 19% expect the economy to worsen and 61% expect economic conditions in six months to be about the same as they are now.