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National Restaurant Association - Looking past choppiness reveals positive sales trend

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Looking past choppiness reveals positive sales trend

Although the first three months of 2016 were marked by uneven restaurant sales, the overall trend remains generally 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.

After following a steady upward trajectory during 2015 – rising in 11 out of 12 months with an average monthly gain of 0.7 percent – restaurant sales became somewhat uneven during the first three months of 2016. 

According to preliminary figures from the U.S. Census Bureau, eating and drinking place sales totaled $53.8 billion on a seasonally-adjusted basis in March.  This was down 0.8 percent from February’s record-high sales volume of $54.2 billion, and represented the second decline in the last three months. 

Despite the choppy performance to start the year, the overall trend remains generally positive.  The combined first quarter sales of $161.2 billion were 1.0 percent above the fourth quarter level (on a seasonally-adjusted basis), and represented the 11th consecutive quarter of restaurant sales growth. 

However, the 1.0 percent first quarter increase was the smallest sales gain since the first quarter of 2014 (+0.2 percent), so it does indicate a degree of softening in trend. 

Compared to retail spending in general, restaurants remain among the stronger performers.  Total retail sales edged down 0.1 percent in the first quarter, due largely to declines at gas stations (-7.6 percent), department stores (-2.4 percent) and auto dealers (-0.9 percent). 

On the flip side, first quarter spending was up at building supply stores (+4.5 percent), non-store retailers (+1.9 percent) and drug stores (+1.2 percent).  Grocery store sales were up 0.6 percent in the first quarter. 

Overall, the story of the American consumer is unchanged: they remain selective in their spending habits, and continue to pick their spots carefully.  Looking forward, steady job growth will continue to be the primary driver of consumer spending, particularly if it is accompanied by stronger wage gains. 


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