Restaurant sales growth slowed significantly in September
Restaurant industry sales continued to trend higher in September, albeit at the slowest pace since the economy began to reopen from the lockdowns. Eating and drinking places* registered sales of $55.6 billion on a seasonally-adjusted basis in September, according to preliminary data from the U.S. Census Bureau.
September’s sales were up 2.1% – or $1.1 billion – from August’s seasonally-adjusted volume of $54.5 billion. While this would be a robust increase in normal times, it was only about half of the gains registered in July and August – in both dollar volume and percentage terms. Overall, eating and drinking place sales in September still remained nearly $10 billion – or 15% – below their pre-coronavirus levels in January and February.
Although restaurant sales growth slowed in September, overall consumer spending picked up. Indeed, the 1.9% increase in total retail sales represented the strongest monthly gain since June. This suggests that many consumers may have shifted their spending away from restaurants to other categories in September.
In August, the 4.3% increase in eating and drinking place sales represented the strongest growth among the major categories tracked by the Census Bureau. In September, the 2.1% increase at eating and drinking places was well below the sales gains at clothing stores (+11.0%), department stores (+9.7%), sporting goods, hobby and book stores (+5.7%) and motor vehicle dealers (+4.0%).
If this trend continues in the months ahead, it likely means that the restaurant industry’s recovery will be even more drawn out.
While the seasonally-adjusted figures offer a directional look at spending trends from month to month, they don’t provide a complete picture of the sales losses that have been experienced by restaurants during the coronavirus pandemic. For this, the Census Bureau’s unadjusted data set is a better measure, because it represents the actual dollars coming in the door.
In total between March and September, eating and drinking place sales were down nearly $162 billion from expected levels, based on the unadjusted data. Add in the sharp reduction in spending at non-restaurant foodservice operations in the lodging, arts/entertainment/recreation, education, healthcare and retail sectors, and the total shortfall in restaurant and foodservice sales likely surpassed $200 billion during the last seven months.
*Eating and drinking places are the primary component of the U.S. restaurant and foodservice industry, which prior to the coronavirus outbreak generated approximately 75 percent of total restaurant and foodservice sales.
Read more analysis and commentary from the Association's chief economist Bruce Grindy.