We Could See Below 2% Q1 GDP Growth

Restaurants & Bars Take Share

Yearly growth in the control group fell from 5.94% to 3%. Yearly motor vehicles and parts sales growth improved from 3.54% to 5.72% and monthly growth rose from -1.51% to 0.17%. That strength in yearly growth might not continue as the auto loan delinquency rate is high. Last month, motor vehicles and parts tanked the report. It prevented it from being great. Remember, this is the largest category in the report as it has a 20.1% weighting. This report would have been great if it wasn’t for weak yearly growth in online sales which has a 12.55% weighting. Monthly non-store sales growth rose from 0.17% to 0.29%, but yearly growth fell from 18.25% to 8.39%.

As you can see from the chart below, bars and restaurants are taking share from food and beverage stores.

Remember from the CPI report, food away from home inflation was 3.1% and food at home inflation was 0.7%. This isn’t great for consumers with this trend in spending share in place. Keep in mind, food away from home inflation is way more consistent as food at home inflation responds more to changes in commodities prices.

Since America is over-retailed in terms of square footage per capita versus other nations and sales are shifting online, restaurants are candidates to fill this empty space. Restaurants anchor malls; malls try to bring in traffic with experiences. Food and beverage stores’ yearly sales growth fell from 3.81% to 2.35%, while food services and drinking stores saw an increase in yearly growth from 6.08% to 7.37%. The stereotype about millennials is they like experiences over material possessions. According to Harris Group, 72% of millennials would rather spend money on experiences than material possessions. That could be behind bars and restaurants’ market share gains since 2000.

View single page >> |

Disclaimer: Please familiarize yourself with our full disclaimer here.

How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.


Leave a comment to automatically be entered into our contest to win a free Echo Show.