Restaurant performance index dips, but operators still optimistic

Washington, D.C. A report released Friday by the National Restaurant Association found that while the association’s index of restaurant activity for the month of January showed a 0.3% decline from December’s level, restaurant operators gained confidence about future economic and business conditions.

The association's Restaurant Performance Index -- a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry -- stood at 98.3 in January, down 0.3% from December's level.

"Although the current situation indicators remained soft in January, the Expectations Index rose above 100 for the first time in nine months," said Hudson Riehle, senior VP research and knowledge group for the NRA.

"Restaurant operators are relatively optimistic about improving sales growth and economic conditions in the months ahead, and their capital spending plans rose to the highest level in five months."

After posting a moderate improvement in December, restaurant operators reported a softening in sales results in January. Twenty-seven percent of restaurant operators reported a same-store sales gain between January 2009 and January 2010, down from 35% of operators who reported higher sales in December. Fifty-seven percent of operators reported a same-store sales decline in January, up from 49% who reported negative sales in December.

Operators however remain relatively optimistic about sales growth in the months ahead. Thirty-three percent of restaurant operators expect to have higher sales in six months (compared with the same period in the previous year), compared with 35% who reported similarly last month. In comparison, 22% of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year, and 21% reported similarly last month.