Restaurant Performance Index Softens for Fourth Straight Month

October 31, 2013 04:49 AM



The National Restaurant Association's (NRA) comprehensive index of restaurant activity -- the Restaurant Performance Index (RPI) -- softened for the fourth straight month to reflect a decline in sales and traffic levels. The RPI declined 0.3% to 100.2. Despite the recent declines, an index above the 100 level represents expansion.

The RPI is watched by livestock analysts as the restaurant sector represents a large portion of meat consumption. Softening of the index is a concern for domestic meat demand, although a reading above 100 signals the economy isn't curtailing demand significantly.

"The RPI's September decline was due in large part to softer same-store sales and customer traffic readings, which were down from stronger levels in August," said Hudson Riehle, senior vice president of the Research and Knowledge Group for NRA. "In addition, restaurant operators' confidence in the economy continued to deteriorate, which was likely due to the fact that the government shutdown and debt ceiling debates occurred during the midst of the survey's October fielding period."

Meanwhile, The Conference Board earlier this week reported its consumer confidence index declined sharply in October. The index now stands at 71.2, down from 80.2 the previous month. Lynn Franco, Director of Economic Indicators at The Conference Board said the deterioration in the index is the result of the federal government shutdown and debt-ceiling crisis. Franco said while the shutdown was temporary, confidence is likely to remain volatile for the next several months due to the temporary nature of the current resolution.


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