Restaurants still taking economic hit

For specialty wholesale bakers serving the restaurant industry, the outlook remains uncertain for their customers. The National Restaurant Association (NRA), Washington, D.C., reports continued slow activity among the nation’s restaurants with an index report that stood below 100 for the 16th consecutive month. The 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 97.5 in February, up 0.1 percent from its January level.

“Although the index registered its second consecutive monthly gain, each of the RPI’s eight indicators stood below 100 in February, which signifies continued contraction,” said Hudson Riehle, senior vice president, research and information services for the association. “A majority of restaurant operators reported negative same-store sales and customer traffic levels in February, and their outlook for sales growth in the months ahead remains uncertain.”

Survey taken monthly

The Restaurant Performance Index is based on the responses to the National Restaurant Association’s Restaurant Industry Tracking Survey, which is fielded monthly among restaurant operators nationwide on a variety of indicators including sales, traffic, labor and capital expenditures. The RPI is constructed so that the health of the restaurant industry is measured in relation to a steady-state level of 100. Index values above 100 indicate that key industry indicators are in a period of expansion, while index values below 100 represent a period of contraction for key industry indicators.

Restaurant operators also reported negative results in both same-store sales and customer traffic levels. Fifty-six percent of operators reported a same-store sales decline in February, up slightly from the 55 percent who reported negative sales in January. Fifty-nine percent of operators reported a traffic decline in February, unchanged from January.

Restaurant operators are slightly more optimistic about the direction of the economy, though pessimists still outnumber optimists. Twenty-two percent of operators expect economic conditions to improve in six months, up from 18 percent who reported similarly last month and the highest level in six months. However, 36 percent of operators said they expect economic conditions to worsen in six months, up from 34 percent who reported similarly last month.

While the RPI is released on the last business day of each month, more detailed data and analysis can be found on Restaurant TrendMapper, the Association's subscription-based Web site that provides detailed analysis of restaurant industry trends.

A chart of the February 2009 RPI is available on the Association's Web site.