Restaurant Sales Surpassed Grocery Store Sales for the First Time

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May 13, 2015, 02:10 ET

WASHINGTON, May 13, 2015 /PRNewswire/ -- Monthly sales at restaurants exceeded grocery stores sales for the first time on record, the National Restaurant Association noted today.

In his latest Economist's Notebook commentary, the National Restaurant Association's Chief Economist Bruce Grindy breaks down industry sales trends:

Restaurants Sales Outpace Grocery Store Sales

For the first time on record in December, monthly sales at restaurants exceeded grocery stores sales, according to data from the U.S. Census Bureau. This development was hinted at through preliminary data releases in recent months, but was officially confirmed by today's annual benchmark of Census data.

The gap between monthly grocery store sales and restaurant sales started gradually shrinking in 2010 – a trend that was partially due to the increase in consumers buying their groceries at big box stores.

There has been a dramatic shift toward restaurants that occurred in the last 10 months. In June 2014, grocery store sales exceeded restaurant sales by $1.6 billion. By April 2015, the gap had essentially reversed, with restaurant sales moving out in front by $1.5 billion.

In fact, the $3.1 billion sales shift registered during the last 10 months is nearly as much as occurred during the previous 4.5 years.

Household Finances Getting a Boost from Lower Gas Prices

The reallocation of consumers' food dollar toward restaurants coincided with the sharp decline in gas prices in recent months, which suggests that the savings at the pump may have helped accelerate this change in consumer behavior. To investigate the impact of lower gas prices, the NRA commissioned ORC International to conduct a national telephone survey of 1,008 adults between April 30 and May 3.

Not surprisingly, 80 percent of car owners say the recent decline in gas prices positively impacted their household finances. This sentiment was generally consistent across all income levels, with individuals in lower-income households the most likely to say that lower gas prices had a 'very significant' positive impact on their finances.

Restaurants Are Likely Benefitting From Lower Gas Prices

Among car owners who say the recent decline in gas prices positively impacted their household finances, 49 percent say the lower gas prices have increased their willingness and ability to do things like purchase meals, snacks or beverages from restaurants, fast food places or coffee shops.

Individuals in lower-income households are even more likely to feel that way, with a majority of car owners in households with income below $50,000 saying the positive impact that lower gas prices are having on their finances has increased their willingness and ability to patronize restaurants, fast food places or coffee shops.

Growing Consumer Confidence Boosting Restaurant Frequency

Overall, 33 percent of adults surveyed say they are patronizing restaurants more often now than they were one year ago. Within this group, the most common reason given is that they feel more confident in their financial situation – mentioned by 63 percent of consumers who are using restaurants more frequently.

Fifty-six percent of consumers say they increased frequency because gas prices are lower, while 46 percent say it's because their household income went up. Three in 10 consumers say they are using restaurants more often because they got a new job or because their home or investments are worth more.

Pent-Up Demand Remains Elevated

With gas prices likely contributing to the dramatic shift in consumer spending during the last several months, the question is if these spending patterns will hold when gas prices increase again.

To be sure, there appears to be even more room for growth in the months ahead. When asked about their current restaurant usage, a significant proportion of the American public say they would like to be patronizing restaurants more often. Thirty-eight percent of all adults say they are not eating on the premises of restaurants as frequently as they would like, while 37 percent say they are not purchasing takeout or delivery as often as they would like.

Putting these results in a historical context, this measure of pent-up demand remains well above pre-recession levels. On a consistent basis during the stronger restaurant business environment of the mid-2000s, typically only one-quarter of adults said they were not patronizing restaurants as frequently as they would like.

To view the charts associated with this commentary, click here: http://www.restaurant.org/News-Research/News/Restaurant-sales-surpass-grocery-store-sales-for-t

Read more from the Economist's Notebook. For additional analysis of restaurant industry trends, log on to Restaurant TrendMapper at Restaurant.org/Trendmapper (subscription required).

Founded in 1919, the National Restaurant Association is the leading business association for the restaurant industry, which comprises one million restaurant and foodservice outlets and a workforce of 14 million employees. We represent the industry in Washington, D.C., and advocate on its behalf. We operate the industry's largest trade show (NRA Show May 16-19, 2015, in Chicago); leading food safety training and certification program (ServSafe); unique career-building high school program (the NRAEF's ProStart); as well as the Kids LiveWell program promoting healthful kids' menu options. For more information, visit Restaurant.org and find us on Twitter @WeRRestaurants, Facebook and YouTube.

View this release online: http://www.restaurant.org/News-Research/News/Restaurant-sales-surpass-grocery-store-sales-for-t

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SOURCE National Restaurant Association