by Calculated Risk on 11/08/2008 06:35:00 AM

From the National Restaurant Association: NRA research finds majority of operators report sales and traffic declines; expectations at an all-time low level. (hat tip Lyle)

“The September decline in the Restaurant Performance Index was the result of broad-based declines across the index components, with both the Current Situation and Expectations indices falling to record lows,” said Hudson Riehle, senior vice president of Research and Information Services for the Association. “Nearly two out of three restaurant operators reported negative same-store sales and traffic levels in September, while 50 percent expect their sales in six months to be lower than the same period in the previous year.”

“The rapid deterioration in economic conditions is reflected in operator sentiment, with a record 42 percent of restaurant operators saying the economy is currently the number-one challenge facing their business,” Riehle added. “Operators aren’t optimistic about the economy looking forward either, with 50 percent expecting economic conditions to worsen in six months.”

Click on graph for larger image in new window.

Any reading below 100 suggests contraction. This index doesn't have a long history, so it is not surprising that the index is at a record low.

Still the index is between below 100 for 13 consecutive months. It is typical in a recession for consumers to pull back on discretionary spending, and restaurants usually feel the pain acutely.

Note that this was for September. It appears October consumer spending was much worse.