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National Restaurant Association - Positive sales trajectory has more room to run

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Positive sales trajectory has more room to run

Restaurant sales rose for the eighth consecutive month in September, with total monthly volume jumping $2.4 billion during the 8-month period.  Despite the recent gains, a new survey indicates that one-half of consumers are still not patronizing restaurants as often as they would like, 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 industry sales continued to grow at a steady pace in September, according to preliminary data from the U.S. Census Bureau.  Eating and drinking place sales totaled $52.7 billion on a seasonally-adjusted basis in September, which represented a strong 0.7 percent increase over a sales total of $52.3 billion in August.

The solid restaurant sales gain came in the midst of lackluster September job growth and continued trepidation among consumers when it comes to both the economy and their own personal finances. 

September represented the eighth consecutive month of restaurant sales growth, with total monthly sales volume increasing by 4.7 percent (or $2.4 billion) during the 8-month period.  In contrast, overall retail sales increased 3.1 percent during the last 8 months, while grocery store sales rose by just 1.0 percent. 

Despite the recent sales gains, new research indicates that one-half of consumers have yet to get their fill of restaurants.  According to a national survey conducted September 24-27 by ORC International for the National Restaurant Association, 48 percent of adults say they are not eating on the premises of restaurants as frequently as they would like.  Similarly, 50 percent of consumers say they are not purchasing take-out or delivery as often they would like. 

While it’s not surprising that a majority of consumers in lower-income households say they would like to be using restaurants more frequently, it’s worth noting that individuals in higher-income households are also reporting a desire to increase their patronage.  In fact, roughly three in 10 consumers in households with income above $75,000 say they are not utilizing either on-premises or off-premises options as often as they would like.  

With these higher-income households accounting for nearly six in 10 dollars spent in restaurants, their elevated levels of pent-up demand suggest that the industry’s current positive sales trajectory has a lot more room to run.

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