NRA: Performance index flat in October

Staff Writer
NRA: Performance index flat in October

Despite a decline in sales and customer traffic, foodservice operators were upbeat about the direction their businesses were taking in October, leaving the National Restaurant Association’s Restaurant Performance Index relatively unchanged from the month before.

The RPI, a monthly composite that tracks the health of and outlook for the restaurant industry, slipped slightly to 100.0 in October from September’s figure of 100.1.

A number above 100 reflects that key industry indicators are in a period of expansion, while anything below 100 indicates contraction.

“Although sales results were somewhat softer in October, restaurant operators reported net positive same-store sales for the fifth consecutive month,” said Hudson Riehle, the NRA’s senior vice president of the research and knowledge group, in a statement.

“In addition, each of the four forward-looking indicators improved in October, which pushed the Expectations Index to its highest level in four months.”

Watch Riehle provide an update on the RPI

The Restaurant Performance Index comprises two components: the Current Situation Index, which measures current trends in same-store sales, traffic, labor and capital expenditures; and the Expectations Index, which measures restaurant operators’ six-month outlook for same-store sales, employees, capital expenditures and business conditions.

The Current Situation Index fell to 99.5 in October, down 0.6 percent from September’s 100.1. This was the third time in the last four months that the Current Situation Index was beneath the 100 mark.

The NRA found that operators enjoyed positive same-store sales for the fifth consecutive month, despite the fact that results declined slightly from September. Forty-five percent of restaurant operators said same-store sales rose between October 2010 and October 2011, down from a more robust 50 percent who reported a sales gain in September.

By comparison, 35 percent of restaurateurs reported lower same-store sales in October, compared with 34 percent who reported similarly in September.

Operators also said traffic was down in October. The NRA said 37 percent of restaurateurs reported increased traffic levels between October 2010 and October 2011, compared with 39 percent who reported a decrease. Forty-three percent of operators said customer traffic was up in September, while 33 percent said traffic declined.

The NRA’s Expectations Index rose to 100.5 in October, an increase of 0.4 percent from September and the highest level in four months. October also was the second consecutive month that the Expectations Index stood above 100, which, the NRA says, reflects an optimistic outlook among foodservice operators for business conditions in the months ahead.

The RPI is based on the NRA’s monthly tracking survey.

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Contact Paul Frumkin at paul.frumkin@penton.com.

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