For all the recriminations about the state of restaurants, and particularly traffic among lower-income diners, industry sales continue to outpace that of other businesses.
Sales at restaurants and bars increased 1% month-over-month in September, the best performance for the business since November, according to retail sales data from the U.S. Census released on Thursday.
Retail sales rose 0.4% last month, meaning consumers were more willing generally to spend money on restaurants than on items like sporting goods or building supplies.
Indeed, they’re spending more on food, period. Sales at retail food and beverage stores also increased 1% last month.
So far in 2024, sales at food services and drinking places are up 5%, despite a period marked by consumer frustration by high prices and weaker traffic at fast-food chains such as McDonald’s and Starbucks.
By comparison, total retail sales are up 2.6% so far in 2024, compared with the same period as 2023. At grocery and liquor stores, sales are up 2%.
Some of the strength in restaurant sales can be attributed to higher prices. Restaurant menu prices are up 3.9% so far this year, compared with 1.3% at grocers.
But that still implies consumers are generally eating out more often at restaurants, perhaps because they’re ordering more delivery or are visiting newly opened restaurants.
It may suggest that consumers are shifting more of their spending to independent restaurants and away from chains, something they’d done before the pandemic largely hammered that part of the business.
Another potential explanation for better sales: lower gas prices. Gas station sales fell 1.6% in September, compared with August, and are down 10.7% compared with the same month a year ago.
Generally speaking, however, the stronger retail sales data, coupled with surprisingly strong job numbers, paint a picture of a healthy economy. Consumer spending drives much of the U.S. economy.
The stronger restaurant and bar sales, for instance, help explain why the industry added nearly 70,000 jobs last month.
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