Restaurant industry sales, traffic soften in February

Foodservice operators appeared more downbeat as they reported softer same-store sales and customer traffic for the month of February, according to the National Restaurant Association’s Restaurant Performance Index.

The RPI, a monthly composite that tracks the health of and outlook for the restaurant industry, slipped to 99.9 in February, a decline of 0.8 percent from January’s 100.6, which reflected a five-month high in the index.

February marks the fourth time in the last five months that the index was below 100, which signifies a contraction in the NRA’s index of key industry indicators.

“The Restaurant Performance Index decline was due largely to softer sales and traffic results, which fell in February amid higher gas prices and the impact of the payroll tax hike,” said Hudson Riehle, senior vice president of the research and knowledge group for the NRA. “In addition, sales and traffic comparisons were more difficult due to the extra day in February 2012 as a result of Leap Year.

“Despite the sales and traffic declines in February, restaurant operators remain generally optimistic about business conditions in the months ahead, which suggests they feel the setbacks will be temporary,” Riehle added.

The RPI consists of two components: the Current Situation Index, which measures current trends in same-store sales, traffic, labor and capital expenditures; and the Expectations Index, which gauges restaurant operators’ six-month outlook for same-store sales, employees, capital expenditures and business conditions.

The Current Situation Index fell to 98.3 in February, a decline of 1.4 percent from January’s level and the sixth consecutive month it languished below the 100 mark. The NRA said sales comparisons were more difficult in February because of the 2012 Leap Year, which contributed to the first same-store sales decline in 21 months.

According to the NRA, 33 percent of operators reported a same-store sales gain between February 2012 and February 2013, while 48 percent tallied lower sales. In the month of January, 44 percent of operators said same-store sales were trending higher, while 37 percent said they experienced a sales decline.

Most operators also said customer traffic levels fell in February. Twenty-four percent reported higher customer traffic levels between February 2012 and February 2013, while 53 percent said traffic had fallen off. In January, 33 percent of restaurateurs reported higher customer traffic, while 40 percent said traffic levels had decreased.

The RPI’s Expectations Index was 101.4 in February, down from 101.6 in January. However, the NRA said each of the four expectations indicators remained around the 100 mark for the second consecutive month, suggesting that operators are upbeat about future business conditions.

While foodservice operators are generally positive about future sales growth, they are less upbeat compared with last month. The NRA said 41 percent of restaurateurs anticipate having higher sales in six months compared with the same period in the previous year — down from 46 percent last month. Fourteen percent say their sales volume in six months will be lower than it was in the same period of the previous year, compared with 17 percent last month.

Meanwhile, 25 percent of operators expect economic conditions to improve in six months, a decline from the 30 percent who reported similarly last month. Twenty percent of operators said they believe that economic conditions will deteriorate in the next six months.

The RPI is based on the responses to the NRA’s monthly tracking survey.

Contact Paul Frumkin at [email protected].
Follow him on Twitter: @NRNPaul