Restaurant Performance Index continues to show mixed results

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As a result of softer sales and a dampened outlook among operators, the National Restaurant Association’s Restaurant Performance Index (RPI) declined for the second consecutive month. The RPI stood at 100.3 in June, down 0.3 percent.

“The uneven trend that the RPI followed during the first half of 2016 was due in large part to choppy same-store sales and customer traffic results,” said Hudson Riehle, senior vice president of research for the National Restaurant Association.

“This uncertainly likely contributed to the Expectations Index dipping to a six-month low in June. However, it’s hard to draw definitive conclusions in either direction right at this point, because the indicators continue to send mixed signals,” Riehle said.

The RPI consists of two components – the Current Situation Index (measuring current trends) and the Expectations Index (measuring restaurant operators’ six-month outlook) – and tracks the health of and outlook for the U.S. restaurant industry.

The Current Situation Index stood at 99.9 in June – down 0.3 percent from a level of 100.2 in May. June marked the second consecutive decline in the Current Situation Index, and represented the first time in five months that the index dipped below the 100 level, which indicates contraction in key indicators.

For the second consecutive month, restaurant operators reported a net decline in same-store sales and customer traffic. Thirty-eight percent reported a same-store sales gain between June 2015 and June 2016, while 43 percent reported a same-store sales decline. Thirty-three percent of operators reported an increase in customer traffic between June 2015 and June 2016, and 49 percent said their traffic declined.

The Expectations Index stood at 100.7 in June – down 0.4 percent from its May level. While the Expectations Index remained above 100 in expansion territory, the June reading represented its lowest level in six months.

Restaurant operators are somewhat less optimistic about sales growth in the months ahead. Thirty-three percent say they expect to have higher sales in six months (compared to the same period in the previous year), and 18 percent expect their sales volume to be lower than it was during the same period in the previous year, which is the highest monthly reading in nearly four years.

Restaurant operators also continue to have a dampened outlook for the overall economy and their outlook for future business conditions remains mixed.

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