As R.P.I. declines, foodservice pessimism climbs

(MEATPOULTRY.com, August 01, 2008)

by Bryan Salvage

WASHINGTON ― As prices for food and commodities continue to climb, the U.S. restaurant industry performance softened in June and the National Restaurant Association's index of restaurant activity posted a modest decline. As a result of continuing market hardships, restaurant operators remain relatively pessimistic about sales growth in coming months, according to the N.R.A. They also remain pessimistic about the direction of the economy.

The Restaurant Performance Index, which is a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry, was 98.3 in June ― down 0.3%from May and the lowest level in three months.

"Restaurant operators reported negative same-store sales and customer traffic levels in June, after posting somewhat stronger results in May," said Hudson Riehle, N.R.A. senior vice-president of research and information services. "The uncertain economy and rising food costs continue to create a challenging business environment for restaurant operators. A record 29% of restaurant operators said the economy is the number-one challenge facing their business, while 22% identified food costs as their top challenge."

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