Americans Didn't Let Inflation Spoil Their Appetite

Despite inflation causing financial headaches in many households across the United States, Americans haven't lost their appetite for dining (and drinking) out. According to the National Restaurant Association, restaurant industry sales are expected to top $1.1 trillion this year - a new record for the industry that will employ more than 15 million people by the end of the year. "Restaurants are finding ways to adapt to the challenges of increased food costs and supply chain disruption," Michelle Korsmo, President & CEO of the National Restaurant Association, said in a statement earlier this year. "Restaurants have responded well to customers’ desire to have more opportunities to enjoy restaurant meals, which continues to grow sales, create employment opportunities, and foster a strong sense of community."

Those claims are backed up by data from the U.S. Census Bureau, which underscores the industry's strength and resilience over the past three, undoubtedly challenging, years. According to the Census Bureau's monthly retail sales report, sales of food services and drinking places amounted to $93.9 billion in April 2024, up 5.5 percent from the month a year ago. While some of that increase can certainly be attributed to higher prices on the menu, the Bureau of Labor Statistics reported that the Consumer Price Index for Food Away From Home increased 4.1 percent year-over-year in April, indicating that the increase in sales can only party be attributed to higher prices.

In fact, sales growth of restaurants, bars etc. has been outpacing price increases throughout the inflation crisis. Since February 2020, food services and drinking places, as they are officially called, have seen (seasonally adjusted) monthly sales surge 36 percent. Meanwhile consumer prices for food away from home have risen by 26 percent and prices of alcoholic beverages away from home have risen by 19 percent.

Food services and drinking places, i.e. restaurants, bars, cafeterias, etc., made an impressive recovery from Covid lockdowns and associated shifts in consumer spending. As the following chart shows, restaurant sales appear to have returned to their pre-pandemic growth path, with several bumps in the road to recovery attributable to surges in Covid infections.