ALEXANDRIA, Va.—Sales at eating and drinking establishments are up over 4% this year, surpassing grocery sales at just 3%, according to U.S. Census Bureau data. CNBC reports that a strong job market and tax cuts have strengthened consumers’ motivation to go out more, saying that Americans are putting more of their budget toward eating out.
“Generally speaking, the consumer—particularly the middle to upper middle-income consumer—is healthy. This group has benefited from stock market gains, stable asset markets, wage growth that is pretty healthy,” said R.J. Hottovy, senior restaurant analyst at Morningstar.
And more financially healthy customers mean more business. As restaurant operators are struggling to find labor and/or in the midst of rising wage costs, they’ll need to adjust to keep up—including environment, technology, delivery services and general upgrades.
“There are two important drivers for the industry from a consumer perspective—convenience and socialization,” said Hudson Riehle, the National Restaurant Association’s senior vice president of research. “Particularly looking at quick service, which has grown much more quickly than table service. There’s a greater focus on the off-premise market including carryout, drive-through, delivery, curbside and even food trucks.”
Analysts are optimistic that the high spending will continue, as long as the job market continues as is.