The National Restaurant Association’s (NRA) comprehensive index of restaurant activity dropped to its lowest since in more than a year amid softer sales and traffic levels. The NRA's Restaurant Performance Index (RPI) declined 0.3% from July to 99.4 in August, marking the second straight month the indicator stood below 100 -- a level which represents expansion in the industry.
"The August decline in the Restaurant Performance Index resulted from softening of both current situation and expectations indicators, as well as Hurricane Irene," said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. "Although restaurant operators reported net positive same-store sales results in August, their six-month outlook for both sales growth and the economy continued to deteriorate. It is important to note that the industry’s August performance is a substantial improvement over the 2008-2009 period, but overall, the near-term health of the restaurant industry will depend heavily on the economy’s ability to create jobs and bolster consumer confidence."
Earlier this week, the Conference Board reported its Consumer Confidence Index was virtually unchanged in September after plunging in August. The index stands at 45.4, up slightly from 45.2 in August.
Juli says: Softening of the RPI is not good news for red meat demand. What we know about meat demand when consumers are concerned about the economy is first they eat out less, but still throw a steak on the grill. When concerns are heightened even more, they switch to less expensive meat cuts.