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The outlook for the restaurant industry worsened in November, as the National Restaurant Association's comprehensive index of restaurant activity fell to a record-low level. The Association's Restaurant Performance Index (RPI) -- a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry -- stood at 96.7 in November, down 0.4 percent from October and its 13th consecutive month below 100.

"The November decline in the Restaurant Performance Index was the result of broad-based declines across the index components, with the Current Situation index falling to a new record low," said Hudson Riehle, senior vice president of Research and Information Services for the Association in a prepared statement. "A solid majority of restaurant operators reported negative same-store sales and traffic levels in November, while nearly one-half expect their sales in six months to be lower than the same period in the previous year."

"The continued deterioration in economic conditions is reflected in operator sentiment, with a record 47 percent of restaurant operators saying the economy is currently the number-one challenge facing their business," Riehle added. "Looking forward, restaurant operators aren't particularly optimistic about an improvement either, with 49 percent expecting economic conditions to worsen in six months."

The Restaurant Performance Index is based on the responses to the National Restaurant Association's Restaurant Industry Tracking Survey, which is fielded monthly among restaurant operators nationwide on a variety of indicators including sales, traffic, labor and capital expenditures. The index consists of two components -- the Current Situation Index and the Expectations Index. (Follow this link to view this month's report: www.restaurant.org/pdfs/research/index/200811.pdf).

Restaurant operators reported negative same-store sales for the sixth consecutive month in November. Twenty-six percent of restaurant operators reported a same-store sales gain between November 2007 and November 2008, down from 29 percent who reported a sales gain in October. Sixty percent of operators reported a same-store sales decline in November, matching the proportion who reported negative sales in both September and October.

Customer traffic levels also remained negative in November. Eighteen percent of restaurant operators reported an increase in customer traffic between November 2007 and November 2008, down slightly from 20 percent who reported similarly in October. Sixty-five percent of operators reported a traffic decline in November, matching the proportion who reported negative traffic in October.

Along with weak sales and traffic levels, capital spending activity remains extremely soft. Thirty-nine percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, which equals the lowest level on record.