Restaurant Performance Index Dips, But Outlook Remains Positive

February 29, 2012 05:31 AM

The National Restaurant Association’s (NRA) comprehensive index of restaurant activity declined by just under a point to 101.3 in January, but remained well above the 100-point benchmark level that signals growth in the industry.

RPI Jan2012

"Although the Restaurant Performance Index dipped somewhat from December’s nearly six-year high, it remained solidly in positive territory," said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. "Restaurant operators reported positive same-store sales for the eighth consecutive month, and a majority of them expect business to continue to improve in the months ahead."

The NRA says along with softer sales and traffic levels, restaurant operators reported somewhat lower capital spending levels. Forty-two percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, the lowest level in 10 months.

Juli says: Beef industry sources estimate around 8 billion lbs. of beef will be consumed in foodservice channels this year. Therefore, the strength of the restaurant industry is an important gauge of red meat demand. As long as the index remains above its 100-point threshold signaling growth, there's no reason to be overly concerned about a decline in beef demand from restaurants. However, if gasoline prices continue to rise, consumers are likely to eat at more more regularly.

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