The collapse of the Restaurant Performance Index (RPI) to its lowest level since the 2008 financial crisis is a concerning indicator of the ongoing economic strain on American families. The RPI fell by 1.3% in July to 97.7 points, reflecting a significant decline in sales, customer traffic, and overall business conditions in the restaurant industry. This drop marks an 8% decrease since 2021, the steepest since the index was established in 2002, signaling a troubling trend typically seen during recessions.
With food prices away from home soaring by 27% since 2020 and fast food prices up 31%, dining out has become a luxury that many can no longer afford. This shift is leading to fears of increased bankruptcies among struggling restaurant chains. The industry is rife with “zombie companies”—businesses that are not only unprofitable but also weighed down by excessive debt. With the economic outlook becoming increasingly bleak, the risk of corporate bankruptcies looms larger than ever, as the BLS warns that traditional models may fail to capture the full scope of economic downturns.
The Restaurant Performance Index (RPI) collapses to the lowest level since the 2008 GFC as high inflation and overpriced home prices destroy working families t.co/0m3DdbIMKK
— Darth Powell (@VladTheInflator) September 14, 2024
1/ These are the 8 companies in restaurant industry that have the greatest chance of going bankrupt, in my opinion.
BurgerFi already went belly-up, by the way. I am scared to do a stock screen for retail stocks. Bankruptcies are down, so the bulls on Fintwit claim. Not the… pic.twitter.com/9bEmhxvFcH
— Warn Tracker 2.0 (@j77324) September 15, 2024
Sources:
restaurant.org/NRA/media/Research/RPI/2024/RPI-July-2024.pdf
restaurant.org/research-and-media/research/economists-notebook/restaurant-performance-index/