Despite the uptick in restaurant sales in April and May, operators’ outlook for future business conditions softened somewhat in recent months, 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 regained a positive footing during the last two months after getting off to an uneven start to the year. According to preliminary figures from the U.S. Census Bureau, eating and drinking place sales totaled $54.9 billion on a seasonally-adjusted basis in May. This was up 0.8 percent from April’s sales volume of $54.4 billion, and marked the second consecutive solid monthly gain.
Overall consumer spending also exceeded expectations in May, with total retail sales rising 0.5 percent on a seasonally-adjusted basis. Combined with a robust 1.3 percent increase in April, this represented the strongest two-month sales gain in more than two years.
May’s retail sales growth was largely driven by gasoline stations (+2.1 percent), but was also supported by spending gains at non-store retailers (+1.3 percent), sporting goods and hobby stores (+1.3 percent), and auto dealers (+0.5 percent). Grocery store sales were up 0.3 percent in May.
On the flip side, sales were down sharply at building supply stores (-1.8 percent) and department stores (-0.9 percent).
Despite the uptick in sales, restaurant operators’ outlook for business conditions softened somewhat in recent months. According to the NRA’s May 2016 tracking survey, only 35 percent of restaurant operators said they expect to have higher sales in six months. This was down from 38 percent in April and 46 percent in March. Meanwhile, 13 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 52 percent expect their sales to remain about the same.