Restaurant revenues hit record, early figures show
July’s numbers mark fifth gain in the past six monthsAugust 28th, 2014
Eating and drinking place sales totaled $47.3 billion in July, the strongest monthly volume on record and up 0.2 percent from June, according to preliminary figures from the U.S. Census Bureau.
Steady job growth and improving consumer confidence point toward continued sales gains in the months ahead, says Bruce Grindy, chief economist for the National Restaurant Association, of Washington, D.C.
July’s uptick marked the fifth gain in the last six months, as consumer spending on food away from home rebounded from the weather-related softness that started the year.
Overall, eating and drinking place sales were up 6.2 percent in the 12 months ending with July, which easily surpassed the 3.7 percent gain in overall retail sales during same period. Restaurant sales growth also was well above the modest 2.4 percent gain in grocery store sales during the last 12 months.
The recent growth in restaurant sales is even more impressive given that it coincided with strong automotive sales, which were up a solid 6.4 percent in the 12 months ending July. A surge in auto sales can sometimes initially crowd out spending in restaurants, as consumers pull back to adjust to their additional monthly obligations. However, that didn’t appear to be the case in recent months.
In the months ahead, business conditions look to be continuing their positive trajectory, Grindy says. The economy added more than 200,000 jobs in each of the last six months—for the first time since 1997—while The Conference Board’s Consumer Confidence Index rose to its highest level in nearly seven years.
For their part, restaurant operators are also generally optimistic that business will improve in the coming months. In the restaurant association’s July 2014 Tracking Survey, 44 percent of restaurant operators said they expect to have higher sales in six months, compared to the same period in the previous year, while only 10 percent of restaurant operators expect their sales to decline in six months.
The National Restaurant Association claims to be the world’s largest food service trade organization, supporting nearly 500,000 restaurant businesses. In partnership with state restaurant associations, it says it advocates for industry interest with local, state, and national policymakers.