The National Restaurant Association's index of restaurant activity sregistered a score of 99.5 in August, essentially unchanged from the previous three months.  When the RPI registers at less than 100 it signifies contraction in the index of key industry indicators.

Citing continued soft sales and traffic levels as the impetus, the National Restaurant Association's index of restaurant activity remained at less than 100 for the fourth consecutive month in August. The NRA's Restaurant Performance Index (RPI) – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 99.5 in August, essentially unchanged from the previous three months.

When the RPI registers at less than 100 it signifies contraction in the index of key industry indicators. The RPI consists of two components, the Current Situation Index and the Expectations Index.

The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 98.9 in August – up slightly from a level of 98.8 in July, according to the NRA. Despite the slight improvement, the Current Situation Index remained at less than 100 for the 36th consecutive month, according to the NRA.

Thirty-eight percent of restaurant operators reported a same-store sales gain between August 2009 and August 2010, compared with 39 percent of operators who reported higher sales in both June and July. Meanwhile, 43 percent of operators reported a same-store sales decline in August, compared with 44 percent of operators who reported negative sales in July.

Restaurant operators also continued to report a net decline in customer traffic levels in August. Thirty-five percent of restaurant operators reported an increase in customer traffic between August 2009 and August 2010, matching the proportion of operators who reported higher customer traffic in July. Forty-two percent of operators reported a traffic decline in August, down slightly from 46 percent who reported lower traffic in July.

Restaurant operators reported relatively steady capital spending levels in recent months. Forty-four percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the past three months, relatively unchanged from the levels reported in the previous three months.

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 100.1 in August – up slightly from a level of 100.0 in July.

Restaurant operators remain cautiously optimistic about sales growth in the coming months. Thirty-eight percent of restaurant operators expect to have higher sales in six months, compared with the same period in the previous year), matching the proportion who reported similarly last month. In comparison, 17 percent of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year, compared with 20 percent who reported similarly last month.

Although their economic outlook softened in recent months, restaurant operators are holding relatively steady on plans for capital expenditures, according to the NRA. Forty-two percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, compared with 43 percent who reported similarly last month.