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Wednesday, August 06, 2008

Restaurant Performance Index Shows Contraction

by Calculated Risk on 8/06/2008 01:21:00 PM

Here is another index to track; the Restaurant Performance Index from the National Restaurant Association (NRA). (hat tip Lyle)

From the NRA: Restaurant Performance Index Declined in June as Same-Store Sales and Customer Traffic Slipped

"The June decline in the Restaurant Performance Index was the result of a drop in the current situation component," said Hudson Riehle, senior vice president of research and information services for the Association. "Restaurant operators reported negative same-store sales and customer traffic levels in June, after posting somewhat stronger results in May."

"The uncertain economy and rising food costs continue to create a challenging business environment for restaurant operators," Riehle added. "A record 29 percent of restaurant operators said the economy is the number-one challenge facing their business, while 22 percent identified food costs as their top challenge."
Restaurant Performance Index Click on graph for larger image in new window.

Unfortunately the data for this index only goes back to 2002.

The index values above 100 indicate a period of expansion; index values below 100 indicate a period of contraction.

Based on this indicator, the restaurant industry has been contracting since mid-year 2007.