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National Restaurant Association - Industry recovery hits speed bump, as May RPI falls below 100

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Industry recovery hits speed bump, as May RPI falls below 100

As a result of softer same-store sales and traffic levels and an erosion of optimism among restaurant operators, the outlook for the restaurant industry softened in May. 

Performance-Index-May-11.jpgThe National Restaurant Association’s Restaurant Performance Index (RPI) – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 99.9 in May, down 1.0 percent from April’s level.  May represented the first time in six months that the RPI stood below 100, which signifies contraction in the index of key industry indicators.

“Like the economy as a whole, the restaurant industry’s recovery hit a speed bump in May, with same-store sales and traffic levels softening from recent months,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association.

 “However, the overall economic fundamentals of the restaurant industry remain positive, which will likely lead to stronger performances in the months ahead,” he said.

The Restaurant Performance Index consists of two components - the Current Situation Index (measuring current trends) and the Expectations Index (measuring restaurant operators’ six-month outlook) - and tracks the health of and outlook for the U.S. restaurant industry.

The Current Situation Index stood at 99.2 in May – down 1.1 percent from April’s level of 100.3.  In addition, the Current Situation Index fell below 100 for the first time in three months, which signifies contraction in the current situation indicators. 

Thirty-nine percent of restaurant operators reported a same-store sales gain between May 2010 and May 2011, down from 50 percent of operators who reported higher same-store sales in April.  In comparison, 40 percent of operators reported a same-store sales decline in May, up from 31 percent of operators who reported lower sales in April.   

In addition, 33 percent of restaurant operators reported an increase in customer traffic between May 2010 and May 2011, down from 38 percent of operators who reported higher traffic in April.  In comparison, 41 percent of operators reported a traffic decline in May, up from 35 percent in April.

The Expectations Index stood at 100.6 in May – down from a level of 101.5 in April.  Although May represented the 10th consecutive month above 100 for the Expectations Index, it was the fourth decline in the last five months, which illustrates a recent erosion of optimism among restaurant operators.    

For more details, read our news release, full RPI report and subscription-based Restaurant TrendMapper.

Watch a video summary of the May RPI, plus highlights od positive economic indicators that bode well for the restaurant industry.

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