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Mood Sours at Restaurants

Facing flat sales, fewer owners are investing in new equipment.

Despite an uptick in sales, restaurant owners are growing more pessimistic about business conditions in the months ahead, the National Restaurant Association reports.

The trade group's outlook index fell below 100 for the fourth straight month in February. Though same-store sales were up, fewer owners were investing in new equipment or remodeling. The monthly index is an industry-wide gauge of sales, traffic and expenditures.

A majority of about 400 owners surveyed last month cited the weaker economy as their biggest challenge. Less than a third of owners surveyed said they expected higher sales in the next six months, and even fewer said they expected economic conditions to improve, the report said.

"Operators' outlook for sales growth and the economy deteriorated sharply, which led to a record-low reading in restaurant operators' outlook and expectations," Hudson Riehle, the group's senior vice president of research and information services, said in a statement. "For the first time in 29 months, recruiting and retaining employees was not the top challenge reported by restaurant operators," he said.

Last updated: Mar 31, 2008

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