The National Restaurant Association’s (NRA) July Restaurant Performance Index posted the best numbers since the COVID-19 pandemic began, though operators expect hardships will continue.
The RPI, a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry, registered moderate gain for July, which was up 0.7 percent from June and represented the highest level since the beginning of the coronavirus pandemic in March. The increase for the month was driven by increased same-store sales and customer traffic readings, both which have continued to gradually improve since April’s record lows.
For the fourth consecutive month, restaurant operators reported a modest improvement in same-store sales, the report notes. Twenty-seven percent of restaurant operators reported a same-store sales increase between July 2019 and July 2020, up from 20 percent who reported similarly in June. Sixty-six percent of operators reported lower same-store sales in July, down from 77 percent in June.
However, the RPI indicates sales readings were not uniform across segments. Although limited-service operators reported a net increase in same-store sales in July, most full-service operators continued to report sales declines.
Most restaurant operators do not expect a rapid return to normal and remain conflicted on the overall direction of the economy, the NRA notes. Restaurant operators remain generally pessimistic about business conditions in the coming months – only 20 percent of operators expect their sales volume in six months to be higher than the previous year and 35 percent expect economic conditions will worsen in six months.
Despite the overall bleak outlook, the NRA reported a somewhat larger proportion of restaurant operators plan to make a capital expenditure in the coming months. Forty-four percent of restaurant operators plan to make a capital expenditure for equipment, expansion, or remodeling in the next six months, up from 39 percent who reported similarly during the previous month.
Read the full report here.