Restaurant index points to contraction

Restaurant index points to contraction

The most recent National Restaurant Association’s (NRA) Restaurant Performance Index (RPI) fell below 100 in August for the first time in eight months, dropping a full percentage point to 99.6. The spate of restaurant bankruptcies this year also points to tougher economic reality.

Anyone looking to restaurant performance as a proxy of the nation’s economic health has reason for concern.

The most recent National Restaurant Association’s (NRA) Restaurant Performance Index (RPI) fell below 100 in August for the first time in eight months, dropping a full percentage point to 99.6.

“Restaurant operators reported soft sales and traffic in August, along with corresponding dips in the labor indicators,” explains Hudson Riehle, NRA senior vice president of research. “While the Expectations component of the index remains in expansion territory, it too has trended downward in the past several months.”

The RPI consists of the Current Situation Index (measuring current trends) and the Expectations Index (measuring restaurant operators' six-month outlook). 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.

The spate of restaurant bankruptcies this year also points to tougher economic reality.

 

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