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Restaurant business slows for second straight month

June 30, 2010 | 11:33 am

Business at the nation’s restaurants dipped in May for the second straight month, according to data released Wednesday by the National Restaurant Assn.

The modest drops in traffic and sales put a particular squeeze on profits, because restaurants had lower revenue just as their costs for food supplies were going up.

About 46% of restaurant owners said their same-store sales had declined in May, up from 41% who said business had declined in April, according to the restaurant association’s monthly survey of its members. About 43% said fewer customers had come in to eat, up from 39% in April.

Still, many restaurant owners had made improvements to their facilities in May, including remodeling and buying new equipment, said analyst Hudson Reihle, senior vice president of the restaurant association. That indicates that owners’ outlook overall for the future is positive, he said.

 Reihle said the rapid increase in wholesale food prices during the month made the squeeze particularly difficult for restaurants. Still, he said, the business overall is doing better than it did during the worst of the economic downturn.

“The overall trend remains positive,” Reihle said.

-- Sharon Bernstein