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Restaurant Industry’s Sales Performance Dampens Positive Outlook

The news : The National Restaurant Association’s Performance Index dropped down to 99.9 last month, as same-store sales and customer traffic at numerous restaurant chains softened.  An industry group study reported that such softening happened because many people are still disheartened from dining out due to the country’s unrelenting unemployment rate.

The reading last May indicated the first time that the performance index went below 100 in the last six months, indicating contraction.   The index was founded on a survey done on restaurant business operators which revealed the present state and expectations for the industry.

This is disappointing news for an industry which has high hopes for recovery. The recent report cut short any optimism that restaurateurs felt in the past months, said Hudson Riehle, NRA’s senior vice president of research.  But faith still remains in the overall general economic fundamentals of the industry, as restaurant operators remain positive that statistics will still show the way to a more resilient performance in the coming months.

The weight of unemployment, soaring fuel price and a feeble real estate market are said to be the reasons why consumers are hesitant to eat at restaurants.  It reported that 40% of restaurant business operators had declined same-store sales in May as compared to last year’s performance, up from 31 percent who reported their decreased sales in April.  39% restaurant operators reported increase in their sales-store sales during May, a downhill trend from the 50% gains last April.

Traffic also went down in May.  The NRA reported that 33% of restaurateurs conveyed improved customer traffic between May 2010 and that of last year, a decrease from the 38% who reported greater traffic last April.  On the other hand, 41% of foodservice operators reported that their customer traffic fell in May, which was higher than April’s reported 35%.

This decline in the association’s Expectations Index indicated the fourth decline in the last five months, giving rise to sliding optimism among key players in the food service industry.

It’s not easy to be optimistic, but there are actually a number of reasons to be one.  Recent news reported that a lot of private employers have been opening jobs for the public, considered to be the toughest gain there had been in the last five years.  Fuel prices are forecasted to decrease this year and food prices have fallen in line with inflation.  It is said that the public is not as worried anymore about the little things – they’d go to dinner if they want to, or to a movie if they see something interesting.  They are slowly ceasing to be anxious about every penny that they spend.

Other than these reasons, the industry cannot afford to lose hope.  Americans can dare to be optimistic just for the sole reason of being in America.  For if America loses hope, how else can the rest of the world cope?  The centuries have seen an extremely resilient American restaurant industry – quick to spring back into shape after being bent, stretched and squashed – and as we look forward to the coming months’ surveys, reports and industry analyses, we dare to count on that.