Restaurant Index Flat in August

An index of restaurant business activity remains soft for a fourth consecutive month.

As a result of continued soft sales and traffic levels, the National Restaurant Association’s comprehensive index of restaurant activity remained below 100 for the fourth consecutive month in August. 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 99.5 in August, essentially unchanged from the previous three months. In addition, the RPI stood below 100 for the fourth consecutive month, which signifies contraction in the index of key industry indicators. [via National Restaurant Association]

 However, those in the industry remain carefully optimistic that better days are ahead.

Restaurant operators remain cautiously optimistic about sales growth in the coming months. Thirty-eight percent of restaurant operators expect to have higher sales in six months (compared with the same period in the previous year), matching the proportion who reported similarly last month. In comparison, 17 percent of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year, compared with 20 percent who reported similarly last month.

The franchise industry operates 13.7% of full service restaurants and almost 60% of limited or quick serve restaurants.

About the Author: Ed Teixeira has over 35 years of franchise industry experience as a franchise executive and franchisee. He has served as a franchise executive in the c-store, manufacturing and home healthcare industries and has licensed franchises in Asia, Europe and South America. Ed operates FranchiseKnowHow  which provides information and advice to prospective and existing franchisees and franchisors. He publishes newsletters for the franchise community.