Better summer weather helped contribute to a slight decline in the restaurant industry's traffic levels in June, driving down the industry's immediate growth direction for the first time in four months. That said, restaurants are still improvising and innovating to improve the long-term reception and sales they see over time.
Restaurant Performance Index falls slightly
The latest Restaurant Performance Index report from the National Restaurant Association found that due largely to soft customer traffic levels, the index fell slightly in June, dropping about eight-tenths of a point from 102.1 to 101.3. Though this fall is the first seen in a while and puts some consternation in the market regarding further drops, the index remained above its median point, 100, for the 16th straight month. This means that for more than a year straight, the industry has expanded notably.
"Although overall same-store sales remained positive in June, the RPI dipped as a result of softer customer traffic levels," said Hudson Riehle, senior vice president of the research and knowledge group for the association. "Looking forward, restaurant operators are generally optimistic about sales growth in the months ahead, and their outlook for capital spending remains near post-recession highs."
The Index consists of two separate factors, the Current Situation Index and the Expectations Index. The former fell by 1.1 percent in June to stand at 100.9, above the point of expansion but closer to the median point than in the previous few months. This is largely because 55 percent of restaurant operators saw growth in their businesses from June 2013 to June 2014, which is down 10 percent from similar reports in May. Traffic levels also took a hit, declining from 47 percent of businesses seeing more customers in May to just 39 percent in June.
The Expectations Index declined as well, though it stands higher than the Current Situation Index at 101.7 percent. Operators have seen continued expansion in the industry for nearly two years straight.
New strategies can help traffic
NPR reported that one way restaurants are striking back against the issue of dwindling traffic is by introducing new marketing strategies. One restaurant in particular has started selling tickets instead of taking reservations, and each ticket can be redeemed for a full meal. This has helped the location boost its profile to a higher level, and the tickets sell out in minutes every day.
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