Monthly Index Falls as Fewer Operators Report Same-Store Sales Growth

The National Restaurant Association’s monthly Restaurant Performance Index fell 0.8 percent in November as operators reported softer year-over-year same-store sales and customer traffic.

The decline offsets most of the 0.9 percent improvement the index saw in October, putting it at 101.1 for November. A value above 100 indicates the restaurant industry is in a period of expansion while any number below 100 is a sign of contraction. The index has remained above 100 since the recovery from the COVID-19 pandemic began in 2021.

The index is comprised of two measurements: the Current Situation Index and the Expectations Index, which respectively measure the current trends and six-month outlook from operators. The decrease in November largely came from the Current Situation Index, which fell 1.4 percent to a level of 100.8. Only 54 percent of operators said their same-store sales rose between November 2021 and November 2022, down from 63 percent who said the same in October. Additionally, 29 percent of operators said their year-over-year sales were lower in November, up from 26 percent the month before.

Restaurants continue to struggle with customer traffic, which has now experienced a net decline for six consecutive months. Only 24 percent of operators said customer traffic improved between November 2021 and November 2022, down from 40 percent in October. Further, a majority (51 percent) said customer traffic was worse in November 2022, up from 43 percent in October.

Despite soft sales and falling customer traffic, operators were actually more positive about sales growth in the months ahead than they were in October. Forty-five percent said they expect their sales volume to improve in six months, up from 43 percent the more before. Meanwhile, only 15 percent are anticipating a sales decrease, down from 17 percent in October.

Alongside that increased optimism, most operators continue to make equipment purchases and plan for other capital spending. Sixty-eight percent of respondents said they made a capital expenditure during the last three months, almost even with the 69 percent who said the same in October. It was the 11 straight months with a reading of at least 60 percent. Looking ahead, 63 percent of operators plan to make a capital expenditure during the next six months, up two points from October. That marked 22 consecutive months with a reading of at least 55 percent.