Restaurant sales

Dine Out: U.S. Restaurant Sales Growth Outpaced Retail Sales Again in November

Year-over-year sales growth for U.S. bars and restaurants in November again outpaced overall retail spending gains for the third month in a row, according to an analysis by S&P Global Market Intelligence.

Food services and drinking places continued to add jobs in November at a faster rate than the economy as a whole, and menu prices continued to rise. Meanwhile, stock prices for most of the 15 largest publicly traded U.S. restaurants by market capitalization rose in the month ended Dec. 13.

Sales growth continues

Food services and drinking places sales rose 5.1% from a year earlier in November to a seasonally adjusted $65.22 billion, according to advance monthly sales estimates from the U.S. Census Office published on December 13. The category includes bars, restaurants, caterers and other food services. suppliers such as McDonald’s Corp. and Starbucks Corp.

All retail sales rose 3.3% in November from the year-ago period, down from the 4.1% year-over-year growth recorded in November 2018. November marked the third month in a row where restaurant and bar sales were faster year-over-year. growth than overall retail sector sales.

In October, food services and drinking places sales increased 5.1% from the year-ago period to $65.43 billion seasonally adjusted on a preliminary basis, up from a previous estimate of 4.7% year-over-year growth. September sales were revised down to 5.9% year-over-year growth from a previous estimate of 6%.

Restaurant sales growth was supported by faster growth in limited-service restaurants, SunTrust Robinson Humphrey analyst Jake Bartlett said in a Dec. 13 report.

November’s results for restaurant sales represent the continued trend of moderate growth after September’s peak and a weaker fourth quarter in 2018, said B. Hudson Riehle, senior vice president of research and insights group. of the National Restaurant Association, in an interview.

“The positive performance definitely continues,” Riehle said.

The labor force is growing

Food services and drinking places added 25,300 workers in November for a seasonally adjusted total of 12.3 million, up 2.6% from a year ago, according to the states Bureau of Labor Statistics States, or BLS.

Total non-farm industries added 266,000 workers in November for a total of 152.3 million workers, a 1.5% increase from the year-ago period. The unemployment rate in November was 3.5%.

Labor issues — recruitment, retention and costs — continue to be among the top challenges cited by many restaurateurs, Riehle said.

McDonald’s agreed in November to pay $26 million to settle a class action lawsuit over pay and working conditions for its staff, the Associated Press reported. This month, the National Labor Relations Board ordered an administrative law judge to approve settlements resolving complaints against McDonald’s USA LLC, McDonald’s Restaurants of Illinois Inc. and 29 franchisees based on violations allegedly committed by McDonald’s Restaurants. of Illinois and franchisees.

SNL picture

Catering costs continue to rise

The cost of restaurant meals continued to rise in November.

Prices in the “out-of-home food” subcategory of the consumer price index, or CPI, rose 3.2% unadjusted for the year through November, according to the BLS. “Out-of-home food” covers the average prices of meals ordered in restaurants.

SNL picture

The CPI for full-service meals and snacks rose 3.6% in the year to November, while limited-service meals and snacks rose 3%. The full-service meals and snacks category includes restaurants where guests are expected at their table, and the limited-service category covers restaurants where people pay for their food in advance.

The CPI’s “food at home” subcategory, which refers to average prices in grocery stores, rose 1% in the 12 months to November.

Restaurant stocks heat up

Nine of the 15 largest publicly traded U.S. restaurants posted stock market gains in the month ended Dec. 13, while stock prices fell for the other six companies, according to Market Intelligence. More generally, the S&P Composite 1500 Restaurants sub-index rose 2.7% and the S&P Composite 1500 index rose 2.4%.

SNL picture

Wingstop Inc. posted a stock price increase of 17.2% in the month ended Dec. 13. The Dallas-based chicken wing company recently tested new kitchen equipment that cuts cooking times, a development that could transform the business by opening up real estate in a different way. would have avoided, said Peter Saleh, an analyst with BTIG, in a Dec. 3 report.

Shares of Bloomin’ Brands Inc. fell 5.5%, the steepest drop among major publicly traded restaurant companies in the month ended Dec. 13. The company behind Outback Steakhouse and Carrabba’s Italian Grill announced Nov. 6 that it was exploring strategic alternatives to maximize value for its shareholders, including a possible sale, and Bloomin’ Brands announced that same-store sales growth in the third quarter was down 0.2%.

“While the comps were disappointing, we believe a slowdown was widely expected by investors given the broader casual dining trends, and we are encouraged by the implied rebound expected in the fourth quarter,” said Sharon Zackfia, analyst at William Blair, in a November 6. report.