Restaurant traffic, even in stronger segments, turns negative Thinkstock

NRA: Sales and operator outlook soften in July

Restaurant Performance Index falls for first time in three months

Restaurant sales and traffic softened in July, and operators were less optimistic about the coming months, the National Restaurant Association said Thursday. 

The combined results led to a decrease in the association’s monthly Restaurant Performance Index for the first time in three months.

The RPI, compiled through a monthly survey of restaurant operators’ sales and expectations, was 100.6 in July, falling 0.4 percent from 101 in June. The association considers the industry to be in expansion mode when the index is above 100.

Sales results in July were mixed. According to the survey, 46 percent of operators reported a same-store sales increase in the month, while 42 percent said same-store sales declined. That was a decrease from June, when 54 percent of operators reported an increase. 

Traffic was also weaker, with 48 percent of operators reporting a decline and 37 percent reporting an increase. In June, 42 percent of operators reported a decline in traffic and 39 percent reported an increase.

The results were in line with same-store sales indices like MillerPulse and Black Box Intelligence, which both reported same-store sales declines in July. Same-store sales fell 0.4 percent during the month, according to MillerPulse, and Black Box said sales fell 2.8 percent.

Operators were also less optimistic about sales growth in the months ahead. Thirty-two percent of operators said they expected higher sales in the next six months, a decline from 42 percent last month.

Operators had a mixed outlook on the economy, with 28 percent expecting economic conditions to improve, rising from 16 percent last month.

But 20 percent of operators also believed conditions would worsen, the highest level since October 2016.

Despite the pessimism, operators were still working on or planning to grow. Sixty-two percent of operators said they made a capital expenditure on equipment, expansion or remodeling in the past three months.

Fifty percent of operators said they were planning to make a capital expenditure in the next six months, but that was a decrease from 58 percent last month.

Contact Jonathan Maze at [email protected]

Follow him on Twitter: @jonathanmaze

TAGS: Finance
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