The National Restaurant Association’s Restaurant Performance Index (RPI) for May indicates slowing but still positive growth in the restaurant sector. The top chart shows the monthly RPI and its two primary component indexes since 2003. The May RPI was 101.4, down slightly from April’s 101.6 but the seventh month in which the index has exceeded the 100 level. A figure above 100 signifies expansion for the sector. Both the current situation and expectations components also fell by 0.2 points in May.

We think it is important to note that the values of the expectations and current situation indexes are again beginning to separate, with expectations once again supporting the overall performance index. As can be clearly seen, it isn’t unusual for the expectations component to be higher than the performance component.

Based on these data, restaurant operators appear to be a very optimistic lot. But it has been actual performance that has pushed the index higher since mid-2011 – a trend that may be coming to an end. Or at least taking a bit of a rest. A positive RPI supported more by expectations and less by actual results concerns us a bit.

The index of same-store sales remained strong at 103.2, the same level as in April. The 100.3 customer traffic index for May, though, was 1.3 points lower than in April. Those numbers appear to be a good news/bad news situation: Fewer customers in the door but each of them is spending more. That’s a logical result of higher wholesale protein prices this spring.

We did note one cautionary item from NRA’s monthly press release. As part of the survey, they ask operators some questions about their outlook for the coming months. Answers to one of those questions indicate that the percentage of operators who expect general economic conditions to worsen over the next six months nearly doubled (from 10% to 19%) in May. The percentage expecting economic conditions to improve grew by 2% to 36% during the month.

The bottom chart corroborates NRA’s monthly performance index, we think. It shows the year-on-year percentage change in sales by foodservice establishments as reported by the Census Bureau. May’s $43.877 billion was 7.5% larger than one year ago. Year to date, foodservice sales stand at 8.1% larger than last year.