Are Restaurant Sales Starting a Trend?
The National Restaurant Association’s performance index showed a decline for August: the second month in a row. At 99.4 at the end of August, .3% lower than it was in July, the industry needs a rate of at least 100 to indicate expansion in the index of key industry indicators.
While some attribute the drop in productivity to the economic hardships brought on by August’s debt-ceiling debate, forecasts for the next six months aren’t looking good. For the first time in three months, restaurant owners have reported lower rates of consumer activity. With ETF’s PEJ (NYSE:PEJ) down 1.5% and PBJ (NYSE:PBJ) down .6%, investors are wondering whether this might be time to sell.
Hudson Riehle, Senior VP for the Research and Knowledge Group for the Association stated “the August decline in the Restaurant Performance Index resulted from softening of both current situation and expectations indicators, as well as Hurricane Irene. Although restaurant operators reported net positive same-store sales results in August, their six-month outlook for both sales growth and the economy continued to deteriorate.”