Wednesday, September 30, 2015

Restaurant Performance Index declines, Indicates slower expansion in August

by Bill McBride on 9/30/2015 12:51:00 PM

Here is a minor indicator I follow from the National Restaurant Association: Restaurant Performance Index Declined in August

As a result of softer same-store sales and customer traffic levels, the National Restaurant Association’s Restaurant Performance Index (RPI) declined in August. The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 101.5 in August, down 1.2 percent from July and the lowest level in 11 months. Despite the decline, August represented the 30th consecutive month in which the RPI stood above 100, which signifies expansion in the index of key industry indicators.
“The RPI's August decline was the result of broad-based declines in the current situation indicators,” said Hudson Riehle, Senior Vice President, Research and Knowledge Group, National Restaurant Association. “Same-store sales and customer traffic softened from July’s strong levels, while the labor and capital spending indicators also dipped.

“Despite the declines, each of the current situation indicators were in expansion territory above 100, which indicates the restaurant industry remains on a positive growth trajectory,” Riehle added.
emphasis added
Restaurant Performance Index Click on graph for larger image.

The index decreased to 101.5 in August, up from 102.7 in July. (above 100 indicates expansion).

Restaurant spending is discretionary, so even though this is "D-list" data, I like to check it every month. Even with the decline in the index, this is a solid reading.

Even with this decline, the index is indicating expansion, and it appears restaurants are benefiting from lower gasoline prices.