RPI Dipped Amid Softer Sales in September

Due in large part to softer same-store sales and customer traffic levels, the National Restaurant Association’s Restaurant Performance Index declined in September.

The monthly composite index that tracks the health of and outlook for the U.S. restaurant industry stood at 101.1 in September, down 0.9 point from a level of 102 a month earlier.

The RPI’s September decline was an offshoot of the slowdown in both same-store sales and customer traffic. Hurricane Florence, which caused severe damage to the southeast coast, was one reason for the moderation in sales, according to Hudson Riehle, senior v.p.-research at NRA.

Still, operators indicated they remain cautiously optimistic about sales growth in the months ahead, says Riehle. However, he added that 23% of operators also said they are concerned that economic conditions could worsen over the next six months.

The Current Situation Index, which measures current trends in same-store sales, traffic, labor and capital expenditures, stood at 100.6 in September. That’s a down 1.7 point from a level of 102.3 in August. Despite the decline, September still represented the eighth consecutive month in which the Current Situation Index stood above the 100 level in expansion territory.

The Expectations Index dipped from August and stood at 101.6 in September, implying that restaurant operators still anticipate improving business conditions in the coming months.

Although sales and traffic levels softened, restaurant operators continued to report steady levels of capital spending. Sixty-six percent of restaurant operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, which represented the seventh consecutive month in which at least six in 10 operators reported making a capital expenditure. A nearly identical number—65% —said they plan to make an expenditure within the next six months.