In his latest commentary, the National Restaurant Association's Chief Economist Bruce Grindy breaks down the latest retail sales figures. Restaurant sales totaled $46.3 billion in October, the strongest monthly volume on record. Looking forward, steady gains in income and jobs will be critical for continued growth in the months ahead.
Restaurant sales surged ahead to a new record high in October, according to preliminary figures from the U.S. Census Bureau. Eating and drinking place sales totaled $46.3 billion in October on a seasonally-adjusted basis, up a full percentage point from September’s sales volume of $45.9 billion. In addition, sales stood roughly $200 million above the previous record high of $46.1 billion registered in April.
Despite the government dysfunction and partial shutdown, the overall business environment for restaurants generally improved in October. The private sector added a net 212,000 jobs in October, its strongest gain in eight months. Even more importantly, gas prices plunged 2.9 percent in October, which freed up additional cash for consumers.
Other discretionary sectors also registered solid gains in October. Sporting goods and hobby stores (1.6 percent), electronics and appliance stores (1.4 percent), vehicle dealers (1.3 percent) and furniture stores (1.0 percent) all saw their sales rise at least a percentage point above September levels.
In contrast, grocery store sales edged up 0.1 percent in October, while overall retail sales gained 0.4 percent.
Overall, restaurant sales have followed a steady upward trajectory during the second half of 2013, after falling off in both May and June. October marked the fourth consecutive monthly gain in restaurant sales, with the monthly volume rising more than $800 million during the four-month period.
Looking forward, the key ingredients for sales gains will be steady employment and income growth, which will give consumers the confidence and capacity to burn off their pent-up demand for restaurants.
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Total Eating and Drinking Place Sales
Seasonally-adjusted monthly sales volume (billions)
Source: U.S. Census Bureau