Retailer Daily

RPI Shifts Course

The RPI (Restaurant Performance Index) slid from 98.6 in April 2009 to 98.3 in May 2009, registering its first decline since December 2008. Declines in both the Current Situation and Expectations indices contributed to the overall drop in score. The National Restaurant Association’s monthly Restaurant Industry Tracking Survey remained under 100 for the 19th consecutive month, a sign of contraction in key industry indicators including sales, traffic, labor and capital expenditures. Highlights from the Current Situation Index and Expectations Index follow.

Current Situation Index Edges Downward

The Current Situation Index declined 0.1 percentage points, from 97 in April 2009 to 96.9 in May 2009. May represented the 21st consecutive month below 100, which signifies contraction in the current situation indicators. Overall same-store sales dropped for the 12th straight month, with 59% of respondents reporting negative same-store sales in May, compared to 60% in April. Another 26% reported positive same-store sales in May, matching the positive same-store sales percentage in April. In addition, customer traffic levels declined for the 21st straight month. Fifty-nine percent of respondents reported a traffic decline in May, compared to 60% who reported lower traffic in April. In addition, 22% of respondents reported an increase in customer traffic in May, compared to 23% in April.

Expectations Index Falls Below 100

The Expectations Index hit 100.2 in April 2009, representing the first time in 18 months it surpassed 100, signifying a positive industry outlook. In May 2009, it fell back to 99.6, reversing five straight months of gains. The percentage of respondents expecting higher sales in six months fell from 33% in April to 29% in May. In addition, 34% of respondents expected the economy to improve in six months in May, down from 37% in April. Conversely, 17% of respondents expected the economy to worsen in six months in May, up from 16% in April.

Economic Signs Remain Mixed

Consumer spending, personal income and disposable personal income all rose in May 2009, although consumer saving levels also significantly increased. In addition, growth of the national trade deficit dropped by roughly 50% between March and April 2009. However, the Consumer Confidence Index fell from 54.8 in May to 49.3 in June. In another negative economic sign, U.S. unemployment hit 9.4% last month. The RPI is based on the responses to the National Restaurant Association’s Restaurant Industry Tracking Survey [pdf], which is fielded monthly among restaurant operators nationwide on a variety of indicators including sales, traffic, labor and capital expenditures. It is released the last business day of each month.