Breaking Stories

Restaurant Spending On The Rise Despite Initial ‘Sticker Shock’

After being devastated by the pandemic, the restaurant industry is coming back, fueled by the vaccine rollout, changing health restrictions, and in some cases by federal aid. With half of all United States adults now fully vaccinated, consumers are ready to spend their money on the meaningful culinary experiences they have been waiting so long to have.

“What we’re hearing from our restaurant partners right now is clearly, with things opening back up, that the mindset of consumers is more willing to get out and about and function normally,” Rob Kenny, director of restaurant partnerships at card-linked offer and transaction-based advertising platform Dosh, told PYMNTS in a recent interview. “Consumers are out, becoming more active, becoming more engaged with restaurants.”

According to U.S. Census data, spending at bars and restaurants rose 2 percent last month to $66 billion, but 30 percent higher than where things were in February. Additionally, the figure marks a massive 120 percent rebound from the COVID-era trough hit in April 2020.

“While the impact of stimulus checks will fade in the coming months, economic fundamentals remain conducive for continued consumer spending growth,” National Restaurant Association  Chief Economist Bruce Grindy said in a release discussing this improving consumption figures. “Households on the aggregate are flush with excess savings accumulated during the pandemic, and the labor market continues to improve.”

In fact, according to a press release from Mastercard emailed to PYMNTS earlier this month, spending at United States eateries is even up from pre-pandemic levels, increasing 6 percent over 2019.

The uptick in restaurant spending is now being helped along by loosening local restrictions, allowing restaurants to serve more customers each night. In the past week alone, several states have allowed full capacity or announced the date at which the change would be made. New York, New Jersey and Connecticut resumed service at full capacity on Wednesday (May 19), reported NBC New York.

Meanwhile, the LA Times reported Friday (May 21) that California will lift capacity restrictions June 15, and Michigan Governor Gretchen Whitmer released a statement announcing that the state will lift capacity limits completely on July 1.

Of course, as new customers return to restaurants, the adjustment will not necessarily be seamless. Kenny noted that, among diners, “there is a sentiment of sticker shock” at the price of restaurant meals now that many have grown used to the thriftiness of cooking at home. PYMNTS data show that for 27 percent of U.S. consumers, or about 68 million people, the most concerning part of the pandemic has been its impact on the U.S. economy and on their own personal finances. For these consumers, special deals and attractive loyalty rewards could help ease on-premises dining back into their routines.

On recent earnings calls, restaurant executives across major brands noted strong sales, predicting continued recovery throughout 2021. An April National Restaurant Association survey of restaurant operators found that restaurants may make some of their COVID-era changes permanent, driving sales into the future. Nine out of ten operators said that, as long as it is permitted by local law, they intended to continue to offer “expanded outdoor seating” even after contagion concerns subside. On the whole, the survey said, 44 percent of operators predict that their average sales throughout the latter months of spring will be higher than their March 2021 sales.

Read More On Economy:

What is your reaction?

In Love
Not Sure

You may also like

Leave a reply

Your email address will not be published. Required fields are marked *