Industry News | March 31, 2009

Restaurant Activity Remains Sluggish for 18th Month Running

Restaurant industry performance remained soft in February, as the National Restaurant Association’s comprehensive index of restaurant activity stood below 100 for the 16th consecutive month. The Association’s Restaurant Performance Index (RPI)--a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry--stood at 97.5 in February, up 0.1 percent from its January level.

“Although the index registered its second consecutive monthly gain, each of the RPI’s eight indicators stood below 100 in February, which signifies continued contraction,” says Hudson Riehle, senior vice president of Research and Information Services for the Association. “A majority of restaurant operators reported negative same-store sales and customer traffic levels in February, and their outlook for sales growth in the months ahead remains uncertain.”

The Restaurant Performance Index is based on the responses to the National Restaurant Association’s Restaurant Industry Tracking Survey, which is fielded monthly among restaurant operators nationwide on a variety of indicators including sales, traffic, labor and capital expenditures. The RPI consists of two components--the Current Situation Index and the Expectations Index.

The RPI is constructed so that the health of the restaurant industry is measured in relation to a steady-state level of 100. Index values above 100 indicate that key industry indicators are in a period of expansion, while index values below 100 represent a period of contraction for key industry indicators.

The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 96.6 in February--up 0.1 percent from January and the second consecutive monthly improvement. Despite the recent gains, February marked the 18th consecutive month below 100, which signifies contraction in the current situation indicators.

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