Although sales and traffic levels remained down, the outlook for the restaurant industry improved in July, according to data from the National Restaurant Association's (NRA) Restaurant Performance Index (RPI). Sales remained negative in July, though restaurant operators reported an improvement from June's performance. All told, 26 percent of operators reported a sales gain between July 2008 and July 2009, up from 22 percent in June. In addition, 58 percent of operators reported a decline in sales in July, down slightly from 61 percent who reported negative sales in June.

Restaurant operators reported negative customer traffic levels for the 23rd consecutive month in July. Twenty-three percent of restaurant operators reported an increase in customer traffic between July 2008 and July 2009, up slightly from 19 percent who reported similarly in June. Fifty-nine percent of operators reported a traffic decline in July, compared to 60 percent who reported lower traffic in June.

Despite the remaining contraction in the restaurant industry, operators are more optimistic about the coming months. Thirty-one percent said they expect to have higher sales in six months (compared to the same period in the previous year), up from 24 percent in June. To compare, 33 percent of restaurant operators said they expect their sales volume in six months to be lower than it was during the same period in the previous year. Operators are also more optimistic about the direction of the economy. Thirty-two percent said they expect economic conditions to improve in six months, up from 24 percent who thought so in June. In comparison, 24 percent of operators expect economic conditions to worsen in six months, down from 26 percent who reported similarly in June.

The NRA's RPI is a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry. To download the complete report, click here.