Restaurant and bar sales declined in December, according to federal data released on Thursday, a fitting end for what had been a tough year for the industry.
Food services and drinking places sales declined 0.3% in December, from November, according to U.S. Census retail sales data. They were up 2.4% compared to the same period a year ago.
In both cases, sales did not keep pace with menu price inflation, suggesting that fewer consumers visited restaurants. Restaurant menu prices increased 0.3% in the month, and 3.6% for the full year.
The industry also appeared to lose some ground to supermarkets and liquor stores, where sales increased 0.3% for the month and 3.1% for the full year, according to the data.
The decline came at the end of a year marked by closures, bankruptcies and weak traffic. Consumers, particularly those with lower incomes, cut back on dining, frustrated by prices driven higher by more than two years of generationally high inflation.
They saved much of their ire for fast-food chains like McDonald’s and Wendy’s, ultimately leading those chains to push lower prices and bundled value deals.
More restaurant companies filed for bankruptcy than any year since 2010, including large chains like Red Lobster and TGI Fridays. And many others closed restaurants, including companies like MOD Pizza, Wendy’s and Denny’s.
For the full year, restaurant and bar sales increased 4.6%. The industry generated $1.1 trillion in sales last year, according to the U.S. Census.
While consumers appeared to prepare their meals at home more often in December, Americans still spend more at restaurants than they do at grocers. Supermarkets and liquor store sales last year increased 2.1% for the full year, to just over $1 trillion.
Still, the results from last month may put a damper on some industry enthusiasm for a comeback from its sales softness this year. Sales improvement in October and November suggested that diners might be returning to some concepts. Traffic at fast-food restaurants declined again in December, however, suggesting the comeback was short-lived, or perhaps something in December kept consumers at home.
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.