Source: National Restaurant Association
In his latest commentary, the National Restaurant Association's Chief Economist Bruce Grindy reports on April sales and some new consumer survey data. Restaurant sales bounced back from a dampened first quarter to hit a new record high in April. Meanwhile, consumers’ pent-up demand for restaurants remains historically high, which suggests they will be ready to ramp up spending even more when their financial situation improves.
Restaurant sales hit a new record high in April, according to preliminary figures from the U.S. Census Bureau. Eating and drinking place sales totaled $45.9 billion in April on a seasonally-adjusted basis, up 0.8 percent from March and approximately $200 million above the previous high registered in December 2012.
After totaling nearly $45.7 billion in December, eating and drinking place sales were dampened somewhat during the first three months of 2013, likely due in part to the impact of the payroll tax hike. On a cumulative basis, eating and drinking place sales in the first quarter were roughly $850 million short of December’s baseline level.
While spending appears to have generally bounced back from the first quarter’s downtick, new NRA survey data shows the potential is there for even more improvements in the months ahead. In a national survey of 1,000 adults conducted April 25-28 for the NRA by ORC International, consumers were asked if they are using restaurants as often as they would like.
The answer was a resounding no, with 49 percent of adults reporting they are not eating on the premises of restaurants as frequently as they would like. This indicator of pent-up demand was even more pronounced among middle-aged consumers, with 59 percent of 35-to-44-year olds and 54 percent of 45-to-54-year olds saying they aren’t eating out as often as they would like. Women (54 percent) were more likely than men (44 percent) to say they would like to dine out more often.
The story is similar for the off-premises market, with 51 percent of adults saying they are not purchasing take-out or delivery as often as they would like. Like the on-premises responses, women (55 percent) were more likely than men (46 percent) to say they would like to be utilizing take-out and delivery options more frequently.
These new survey results suggest that once consumers are feeling more confident about their personal financial situation, they will be primed to burn off some of their accumulated pent-up demand for restaurants.