The National Restaurant Association's Chief Economist Bruce Grindy breaks down the latest retail sales figures. Restaurant sales posted a modest gain in February, but remained relatively soft for the third consecutive month. Despite the recent soft patch, restaurant operators are cautiously optimistic about an improving sales environment in the months ahead.
Restaurant sales remained dampened in February, due in large part to continued challenging weather in many parts of the country. Eating and drinking place sales totaled $46.5 billion on a seasonally-adjusted basis, up 0.3 percent from January’s downward-revised sales volume of $46.4 billion, according to preliminary figures from the U.S. Census Bureau.
Despite the modest uptick, February represented the third consecutive month of relatively soft sales for the industry. After hitting a record high in November, eating and drinking place sales plunged 1.0 percent in December and 0.9 percent in January. Looking at the last three months combined, sales were off more than $2 billion from November’s record sales volume of $47.3 billion.
The restaurant industry mirrored overall consumer spending in February, with total retail sales also rising 0.3 percent on a seasonally-adjusted basis. However, the December (-0.3 percent) and January (-0.6 percent) declines in overall retail sales were much less severe than the corresponding performance in eating and drinking place sales.
Grocery store sales edged down 0.1 percent in February, but were up a combined 1.7 percent in December and January.
Despite the recent soft patch, February’s restaurant sales volume still remained 2.6 percent above its February 2013 level. In comparison, grocery store sales were up 2.4 percent, while overall retail sales rose only 1.5 percent above year-ago levels.
Looking forward, restaurant operators are cautiously optimistic that sales conditions will improve in the months ahead. In the NRA’s February 2014 Restaurant Industry Tracking Survey, 41 percent of restaurant operators said they expect to have higher sales in six months, compared to the same period in the previous year. Only 11 percent of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year, while 48 percent expect their sales to remain about the same.
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