Growth in higher-income households bolsters restaurant sales
Higher-income households are critical drivers of growth in the restaurant industry. According to data from the Bureau of Labor Statistics, households with annual income of at least $70,000 were responsible for 63 percent of total restaurant spending in 2018. This despite representing only 40 percent of all households in the United States.
The good news for restaurants is that the number of higher-income households rose steadily in recent years. According to data from the U.S. Census Bureau, there were 39.1 million households with annual income of $100,000 or higher in 2018. This was a record high, and represented an increase of 29 percent from the 2011 level, after adjusting for inflation.
Households in the $75,000-to-$99,999 income bracket were the second-fastest growing category in recent years, with their numbers rising 12 percent between 2011 and 2018. In total, there were 10.5 million more households with income above $75,000 in 2018 than there were in 2011, after adjusting for inflation.
The recent steady upward trend is important, because the number of higher-income households shrunk as a result of the Great Recession. After reaching a cyclical peak in 2007, the number of households with income of at least $100,000 fell 6 percent by 2011. During the same four-year period, the number of households in the $75,000-to-$99,999 income bracket declined 3 percent.
If the positive trend in higher-income households continues, it bodes well for restaurant sales growth in the years ahead.
Read more analysis and commentary from the Association's chief economist Bruce Grindy.