U.S. Restaurants Show Expansion Again in June
MP: Both the RPI and the Expectations Index have remained above 101 for the last seven months, which is consistent with the levels for those two indexes back in the pre-recession time frame in late 2006 and early 2007. This is one indication that the U.S. restaurant industry is operating at pre-recessionary levels.
More evidence of an improving market for U.S. restaurants is provided by Census data showing that sales for "Food Services and Drinking Places" increased 6.3% in June from a year ago, following a 7.4% increase in May. After being flat for most of 2008 and 2009, "Food Services and Drinking Places" sales activity in June of this year is 16.5% above the June level three years ago when the recession officially ended. Further, sales at "Full Service Restaurants" were up by 8.2% year-over-year in May (data not yet available for June) following a gain of 8.7% in April.
Many of the key indicators suggest that the restaurant industry has gradually recovered from the effects of the 2008-2009 recession, and inflation-adjusted restaurant sales are now almost back to their pre-recession levels. Regardless of how consumers answer confidence survey questions, the ongoing improvements in restaurant sales and the RPI so far this year would indicate that based on actual consumer spending at restaurants, consumer confidence is fairly high.