Restaurant sales are trending modestly higher

Consumers were the driving force behind the strong post-pandemic economic expansion, as a healthy labor market and elevated savings allowed them to spend at a torrid pace. While cooling growth in both employment and wages tested their resilience in recent months, the expectation is that households will retain both the desire and wherewithal to continue incorporating restaurants into their spending plans in the months ahead.

That resiliency won’t necessarily translate to strong growth though, as reflected by the recent trajectory in restaurant sales.  

Eating and drinking places* registered total sales of $94.7 billion on a seasonally adjusted basis in July, according to preliminary data from the U.S. Census Bureau. Although July represented the fourth consecutive month of rising sales, the rate of growth remained relatively small. July’s sales increase of 0.3% came on the heels of modest 0.1% gains in both May and June.  

In total during the last 4 months, eating and drinking place sales were up 1.1%. That was slightly above the 0.8% gain in non-restaurant retail sales during the same period. 

The modest sales growth in recent months was largely driven by rising menu prices. As a result, real restaurant sales remained essentially flat, after adjusting for menu price inflation. In inflation-adjusted terms, eating and drinking place sales declined 0.7% between July 2023 and July 2024.

*Eating and drinking places are the primary component of the U.S. restaurant and foodservice industry and represent approximately 75% of total restaurant and foodservice sales. Monthly sales figures presented above represent total revenues at all eating and drinking place establishments. This differs from the National Restaurant Association’s sales projections, which represent food and beverage sales at establishments with payroll employees. 

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