By all rights, this should be a season of discontent for the restaurant industry.
Among the pressures facing this sector: Icy temperature, concerns about prices, a drop in consumer spending, and the fact that January and February are historically the slowest time of year for America’s eateries.
But according to a New York Times report Sunday (March 9), that doesn’t seem to be the case this year, with consumers dining out at unusual levels, and spending more on meals.
The report cites National Restaurant Association data showing that January restaurant sales came to $98.6 billion, almost $2 billion higher than the same month last year.
And while February’s sales numbers haven’t been released, data from OpenTable shows that the number of diners in January and February was about 5% higher than a year earlier. It’s a trend that’s at play at both casual and high-end restaurants, the report added.
“It is actually a bit bewildering,” Ryan Fletter, owner of Denver’s Barolo Grill, told the NYT. “I am thrilled and surprised.”
That restaurant, an Italian eatery in Denver’s affluent Cherry Creek neighborhood, had its most successful January and February ever, with the average check increasing by around 10% even though menu prices remained the same.
Customers “are having a nicer bottle of wine, they are consuming more food, they are doing tasting menus and not à la carte,” Fletter said.
The figures from this report present a different picture than the one painted by the latest reading from the Fiserv Small Business Index, which showed that foot traffic has been strong at restaurants but sales were not keeping pace. Spend actually fell in January, by 1.7%, from a year earlier.
“The average ticket size is decreasing,” said Prasanna Dhore, chief data officer at Fiserv, “and this is probably due to inflationary pressures” as consumers stretch their dollars. In fact, as he pointed out, restaurants increased sales 2.3% through all of 2024, but adjusting for inflation, sales actually fell 1.8%.
“Margins are getting squeezed,” Dhore added, “because there’s only so much cost that they can pass on to the consumers.”
Meanwhile, the latest edition of the Federal Reserve’s Beige Book noted an uncertain landscape among businesses and consumers, as PYMNTS wrote last week.
“The trade war and tariff situation is fluid, but the central bank’s sources are already pivoting, which means that the pressure on consumers may only deepen,” that report said. “At the moment, businesses are grappling with the costs of doing business, and the pass through, to consumers, seems just on the horizon.”
