by Bill McBride on 12/31/2012 03:51:00 PM
Monday, December 31, 2012
From the National Restaurant Association: Restaurant Performance Index Improved in November but Remained Below 100 for Second Consecutive Month
The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 99.9 in November, up 0.5 percent from October. However, November marked the second consecutive month in which the RPI stood below 100, which signifies contraction in the index of key industry indicators.Click on graph for larger image.
“The November gain in the RPI was driven by improving same-store sales and customer traffic levels, both of which registered their strongest performance in three months,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “However, restaurant operators remain concerned about the direction of the overall economy, due in large part to the uncertainty around the fiscal cliff.”
The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 99.8 in November – up 0.6 percent from a level of 99.3 in October. Although restaurant operators reported net positive sales and traffic results in November, softness in the labor and capital spending indicators outweighed the performance, which resulted in a Current Situation Index reading below 100 for the fourth time in the last five months.
The index increased to 99.9 in November, up from 99.5 in October (below 100 indicates contraction).
Restaurant spending is discretionary, so even though this is "D-list" data, I like to check it every month.
Note: It appears that the "uncertainty around the fiscal cliff" will be resolved (My initial guess is austerity will subtract around 1.5% to 2.0% from GDP in 2013 - with the largest drag coming from the increase in the payroll tax - but we still need the details).
Posted by Bill McBride on 12/31/2012 03:51:00 PM