Restaurant sales continued to trend higher in May, even as consumers boosted their spending on autos, gasoline and some discretionary items. The outlook for restaurant sales growth remains positive for the months ahead, as consumers continue to benefit from dampened gas prices and an improving job market, according to the NRA’s chief economist Bruce Grindy. His Economist’s Notebook commentary and analysis appears regularly on Restaurant.org and Restaurant TrendMapper.
Restaurant sales continued to trend higher in May, even as consumers boosted their spending on autos, gasoline and some discretionary items. According to preliminary figures from the U.S. Census Bureau, eating and drinking place sales totaled $51.5 billion on a seasonally-adjusted basis in May, up 0.1 percent from April’s sales volume.
The May sales gain marked the 15th increase the last 16 months, with the only downtick coming in January. In total during the last 16 months, monthly sales volume at eating and drinking places rose by nearly $6 billion.
Overall, total retail sales jumped 1.2 percent in May, the third consecutive monthly gain as both March and April figures were revised higher. The strong May spending growth was driven by a 2.0 percent increase at auto dealers, as vehicle sales soared to a post-recession high of 17.8 million units during the month.
Sales at gas stations increased 3.7 percent in May, as pump prices rose somewhat from their recent lows. However, consumer spending at gas stations was still down 19 percent from year-ago levels, which continues to free up cash for additional spending in other sectors.
Elsewhere, May was also a positive sales month for building supply stores, apparel stores, and non-store retailers.
Grocery store sales totaled $50.5 billion in May, a 0.3 percent increase over their April sales volume. Despite the gain, grocery store sales remained below eating and drinking place sales for the sixth consecutive month, as the trend that began in December remained in place.
Looking ahead, the outlook for restaurant sales is generally positive for the rest of the year. Gas prices remain relatively low by recent historical standards, and the nation’s job market continues to improve.
Restaurant operators share this positive sentiment for business conditions, according to the latest readings of the NRA’s Restaurant Performance Index. Fifty-two percent of restaurant operators said they expect to have higher sales in six months, while only 6 percent expect their sales to decline in six months (both compared to the same period in the previous year). This marked the seventh consecutive month in which a majority of operators had a positive sales outlook, the first such occurrence since 2006.