Restaurant sales rose for the 11th consecutive month in January

Given the positive economic outlook and healthy household balance sheets, the upward sales trajectory likely has more room to run.

Consumers were much more cautious with their spending in January – except when it came to restaurants. That was a continuation of the pattern of the last several months, when consumers often prioritized restaurants in their spending habits.

Eating and drinking places* registered total sales of $95.1 billion on a seasonally adjusted basis in January, according to preliminary data from the U.S. Census Bureau. That was up 0.7% from December and represented the 11th consecutive month of sales growth.

In contrast, consumer spending in non-restaurant retail sectors plunged 1.1% in January, the 3rd decline in the last 4 months. Restaurants were one of the few bright spots in an otherwise cloudy sales report in January, with most retail categories seeing a pullback in consumer spending.

In total during the last 11 months, eating and drinking place sales increased 9.0% on a seasonally adjusted basis. That was well above the modest 0.8% gain in non-restaurant retail sectors during the same period.

A healthy labor market is the linchpin of consumer activity, particularly when it comes to discretionary categories like restaurants. Given the positive economic outlook and healthy household balance sheets, the upward trajectory in restaurant sales likely has more room to run.

Restaurant sales also trended higher in inflation-adjusted terms during the last several months, as sales growth outpaced increases in menu prices. After adjusting for menu price inflation, eating and drinking place sales were up 4.3% during the last 11 months.

*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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