Restaurant Sector Makes Sales History

WASHINGTON, DC—While shopping center owners and investors will no doubt still prefer grocers to anchor their properties, the restaurant sector made history recently, besting grocers in sales.

The National Restaurant Association reports that according to US Census Bureau data, monthly sales at restaurants exceeded grocery store sales for the first time on record in December and that new trend has intensified in recent months. National Restaurant Association Chief Economist Bruce Grindy in his Economist's Notebook commentary relates that the historic upset was hinted at through preliminary data releases in recent months. The restaurant sector's sales win was confirmed on Wednesday by the U.S. Census Bureau. In fact, the association reports that the reversal of fortunes began in 2010 when the normal wide sales gap between the restaurant and grocery sector began to shrink, due in part to the increase in consumer preference to grocery purchases at big box stores.

A dramatic sales shift toward restaurants has 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.

The $3.1-billion sales shift during the last 10 months is nearly as much as occurred during the previous 4.5 years, the association states.

The keys to this dramatic sales shift include households benefitting from lower gas prices and growing consumer confidence, which has likely resulted in more frequent restaurant visits.