As a result of broad-based declines in both current situation and expectations indicators, the National Restaurant Association’s Restaurant Performance Index (RPI) fell sharply in December.
The RPI stood at 99.7 in December, down 1.6 percent from November’s level of 101.3. In addition, December marked the first time since February 2013 that the RPI stood below 100, which signifies contraction in the index of key industry indicators.
“Elements of the economy remained uncertain toward the end of 2015, which is reflected in the RPI and restaurant operators’ less optimistic outlook,” said Hudson Riehle, senior vice president of research at the National Restaurant Association.
“Restaurateurs are facing a range of headwinds in the operating environment, and while some signs are trending in a positive direction, several others remain less promising. The sustained period of moderate economic growth and its regional variations in particular is taking a toll on operators’ psyche," Riehle added.
The RPI 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 99.4 in December – down 1.6 percent from a level of 100.9 in November. In addition, the Current Situation Index fell below 100 for the first time since February 2014.
For the first time in nearly three years, restaurant operators reported a net decline in same-store sales. Forty-two percent of restaurant operators reported a same-store sales gain between December 2014 and December 2015, while 43 percent reported a sales decline. Restaurant operators also reported a net decline in customer traffic results in December.
The Expectations Index stood at 100.1 in December – down 1.6 percent from a level of 101.7 in November. Although the Expectations Index remained above 100 for the 38th consecutive month in December, the dampened level indicates that restaurant operators are less optimistic about business conditions in the coming months.