Restaurant sales declined along with other major retail sectors in February, which suggests that many consumers in weather-impacted parts of the country decided to stay home. Despite the downtick, the outlook for restaurant sales growth is optimistic for the remainder of 2015, as the underlying fundamentals remain positive, according to the NRA’s Chief Economist Bruce Grindy. His Economist’s Notebook commentary and analysis appears regularly on Restaurant.org and Restaurant TrendMapper.
Contrary to the positive signals that were implied from the strong employment report, restaurant sales appear to have been dampened by the extreme winter weather conditions in February. According to preliminary figures from the U.S. Census Bureau, eating-and-drinking -lace sales totaled $49.6 billion on a seasonally-adjusted basis in February, down 0.6 percent from January’s volume of $49.9 billion.
Restaurant sales declined along with other major retail sectors in February, which suggests that many consumers in weather-impacted parts of the country decided to stay home. Sales at auto dealers (-2.5 percent), building supply stores (-2.3 percent), electronics and appliance stores (-1.2 percent) and department stores (-1.2 percent) all fell sharply in February.
All wasn’t lost for consumers in February though, as spending at non-store retailers jumped 2.2 percent from its January level. A good portion of this growth was likely online shopping, though fuel oil dealers also fall under this broad category.
Despite the downtick, restaurant sales remain on a positive trajectory, due largely to the surge in spending that coincided with the sharply decline in gas prices during the second half of 2014. Sales at eating and drinking places jumped 5.8 percent during the last six months of 2014, which translated to additional monthly spending of $2.7 billion. As a result, February’s sales volume stood nearly 8 percent above year-ago levels.
Overall, the outlook for restaurant sales growth is optimistic for the remainder of 2015, as the underlying fundamentals remain positive. The national labor market is steadily improving, with the 3.3 million jobs added during the last 12 months representing the strongest 12-month gain in nearly 15 years. The resulting boost to consumer confidence, along with continued benefit of dampened gas prices, should help drive spending as the weather warms.