Restaurant Industry Index Rises, Boosted by Stronger Sales

September 28, 2012 05:01 AM
 

The National Restaurant Association’s (NRA) comprehensive index of restaurant activity posted a modest gain in August, boosted by stronger sales. The Restaurant Performance Index (RPI) -- a monthly composite that tracks the health and outlook for the U.S. restaurant industry -- stood at 100.6 in August, up 0.4% from July and the first increase in five months. August represented the tenth consecutive month that the RPI stood above 100, which signifies continued expansion in the index of key industry indicators.

"Growth in the RPI was driven largely by improving same-store sales and customer traffic results in August," said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. "Six out of 10 restaurant operators reported positive same-store sales in August, while customer traffic readings bounced back from July’s net decline. In contrast, the Expectations Index remained dampened compared to recent stronger levels, with restaurant operators retaining a cautious outlook for sales growth and the economy in the months ahead."

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Restaurant operators remain generally optimistic that their sales levels will improve in the months ahead, as their sales outlook was essentially unchanged from last month. Forty percent of restaurant operators expect to have higher sales in six months (compared to the same period in the previous year), compared to 42 percent who reported similarly last month. Meanwhile, only 12 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, down slightly from 15 percent last month.


Juli says: Strength in the restaurant industry is key for red meat demand, but consumers will be guarding their dollars more closely as we approach the holiday shopping season. The latest GDP data, which showed the second quarter didn't perform as well as earlier expected, could be a sign that consumers are being more cautious.

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