Friday, March 29, 2013

Restaurant Index declines in February

by Bill McBride on 3/29/2013 02:02:00 PM

From the National Restaurant Association: Restaurant Performance Index Fell Below 100 in February as Sales and Traffic Levels Declined

Due in large part to softer same-store sales and customer traffic levels, the National Restaurant Association’s Restaurant Performance Index (RPI) slipped below 100 in February. The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 99.9 in February, down 0.8 percent from January’s five-month high. February represented the fourth time in the last five months that the RPI stood below 100, which signifies contraction in the index of key industry indicators.

“The Restaurant Performance Index decline was due largely to softer sales and traffic results, which fell in February amid higher gas prices and the impact of the payroll tax hike,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “In addition, sales and traffic comparisons were more difficult due to the extra day in February 2012 as a result of Leap Year.”

“Despite the sales and traffic declines in February, restaurant operators remain generally optimistic about business conditions in the months ahead, which suggests they feel the setbacks will be temporary,” Riehle added.
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The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 98.3 in February – down 1.4 percent from January’s level. In addition, the Current Situation Index stood below 100 for the 6th consecutive month, which signifies contraction in the current situation indicators.
Restaurant Performance Index Click on graph for larger image.

The index decreased to 99.9 in February, down from 100.6 in January. (above 100 indicates expansion).

Restaurant spending is discretionary, so even though this is "D-list" data, I like to check it every month.