Americans Won’t Let Inflation Spoil Their Appetite

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Despite the surge in consumer prices, Americans haven’t lost their appetite for dining (and drinking) out. That’s according to the latest estimates from the U.S. Census Bureau, showing that monthly sales of food services and drinking places amounted to $95.5 billion in January, up 7 percent from the previous month and more than 25 percent compared to January 2022. While some of that increase can certainly be attributed to higher prices on the menu, the Bureau of Labor Statistics reported a 8.2 percent price increase for “food away from home” in January, indicating that demand was in fact much stronger than last year.

In fact, sales growth of restaurant, bars etc. has been outpacing price increases throughout the inflation crisis. Since February 2020, food services and drinking places, as they are officially called, have seen sales surge by 40 percent. Meanwhile consumer prices for food away from home have risen by 19 percent and prices of alcoholic beverages away from home have risen by 14 percent.

Food services and drinking places, i.e. restaurants, bars, cafeterias, etc., made an impressive recovery from Covid lockdowns and associated shifts in consumer spending. As the following chart shows, restaurant sales appear to have returned to their pre-pandemic growth path and then some, with several bumps in the road to recovery attributable to surges in Covid infections.

This chart shows seasonally adjusted sales of food services and drinking places in the United States.