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NRA's RPI Takes a Dip

National Restaurant Association's Restaurant Performance Index (RPI) declined for the third consecutive month in June. A monthly composite index that tracks the health of and outlook for the U.S. restaurant industry, the RPI stood at 99.5 in June, down 0.3 percent from May and the lowest index level since February. In addition, the RPI stood at less than 100 for the second consecutive month, which signifies contraction in the index of key industry indicators.

Restaurant operators reported a net decline in same-store sales for the third consecutive month in June, though the results were a modest improvement from the May performance. Thirty-nine percent of restaurant operators reported a same-store sales gain between June 2009 and June 2010, up from 35 percent of operators who reported higher sales in May. Meanwhile, 43 percent of operators reported a same-store sales decline in June, down from 46 percent of operators who reported negative sales in May.

Restaurant operators also reported a net decline in customer traffic levels in June. Thirty-three percent of restaurant operators reported an increase in customer traffic between June 2009 and June 2010, matching the proportion who reported higher customer traffic in May.  Similarly, 43 percent of operators reported a traffic decline in June, unchanged from the proportion who reported lower traffic in May.

Along with soft sales and traffic results, restaurant operators reported a dip in capital spending activity.  Forty-three percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, down slightly from 45 percent who reported similarly last month.

The Expectations Index, which measures restaurant operators' six-month outlook for four industry indicators (same-store sales, employees, capital expenditures and business conditions), stood at 100.2 in June – down 0.6 percent from May and its lowest level in five months. Despite the recent declines, the Expectations Index remained above 100 for the sixth consecutive month, which represents expansion in the forward-looking indicators.