June RPI Falls to Lowest Level in 16 Months

After rising half a percent in May, the National Restaurant Association’s Restaurant Performance Index (RPI) took a nosedive in June, falling 1.3% and to the lowest level in 16 months.

The RPI, which tracks the health of the U.S. restaurant industry, now stands at 101.3. Levels above 100—considered the “neutral” level—indicate overall expansion for the restaurant industry, while values below 100 represent a period of contraction for key industry indicators. The RPI is based on a Current Situation Index and an Expectations Index.

The Current Situation Index (which measures trends in four categories: same-store sales, traffic, labor and capital expenditures) dropped 1.8% to 101.7. While most restaurant operators continued to report higher same-store sales compared to last year, the National Restaurant Association says customer traffic readings turned negative for the first time since February 2021.

The Expectations Index (which measures same-store sales, employees, capital expenditures and business conditions) fell 0.7% to 100.9, marking the sixth consecutive monthly decline. The National Restaurant Association says operators are “increasingly uncertain” about business conditions, with only one in five expecting the economy to improve in the next six months.

Here are some other key figures from the June RPI:

• 64%: The percentage of restaurant operators who said their same-store sales rose between June 2021 and June 2022—down from 71% in May.
• 31%: The percentage of restaurant operators reporting their customer traffic rose between June 2021 and June 2022—down from 55% in May.
• 69%: The percentage of restaurant operators who made a capital expenditure for equipment, expansion or remodeling during the last three months, down from 71% in May but representing the sixth consecutive month with readings of at least 60%.
• 48%: The percentage of restaurant operators who expect their sales volume in six months to be higher than during the same period in the previous year—down from 55% last month.
• 20%: The percentage of restaurant operators who think economic conditions will improve in six months, up from 18% last month.
• 62%: The percentage of restaurant operators planning to make a capital expenditure for equipment, expansion or remodeling during the next six months—up from 59% last month and the 17th consecutive month with readings of at least 55%.