In his latest commentary, the National Restaurant Association's Chief Economist Bruce Grindy breaks down the latest retail sales figures. Restaurant sales fell for the second consecutive month in January after hitting a record high in November. The sales declines were due in large part to extreme weather conditions, and the outlook for 2014 remains positive.
Restaurant sales declined for the second consecutive month in January, according to preliminary figures from the U.S. Census Bureau. Eating and drinking place sales totaled $46.7 billion in January on a seasonally-adjusted basis, down 0.6 percent from December’s sales volume of $46.9 billion.
The January decline followed a 0.7 percent drop in December, which came on the heels of five consecutive monthly gains. Taken together, the December and January sales declines shaved nearly $1 billion off November’s record high volume of $47.3 billion.
The recent sales declines were due in large part to unseasonably cold weather conditions in many parts of the country, which took its toll on customer traffic in both December and January.
The weather also dampened overall retail sales during the last two months, though the impact was much less severe than what was felt in the restaurant industry. Total retail sales dipped in both December (-0.1 percent) and January (-0.4 percent), but the combined decline was less than half of the dropoff in restaurant sales.
Grocery stores were the beneficiaries of the downtick in restaurant traffic, with sales rising 1.7 percent and 0.4 percent in December and January, respectively.
Despite the recent declines, the outlook for the rest of the year remains positive. Driven by an improving economy and elevated levels of pent-up demand among consumers, the National Restaurant Association expects the restaurant industry to post sales growth of 3.6 percent in 2014.
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