Americans Won't Let Inflation Spoil Their Appetite

Despite inflation causing financial headaches in many households across the United States, 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 $94.7 billion in November, up 2 percent from the previous month and 11 percent compared to the same period of last year. While some of that increase can certainly be attributed to higher prices on the menu, the Bureau of Labor Statistics reported that the Consumer Price Index for food away from home increased 5 percent year-over-year in November, indicating that the increase in sales can only party be attributed to higher prices.

In fact, sales growth of restaurants, 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 38 percent. Meanwhile consumer prices for food away from home have risen by 24 percent and prices of alcoholic beverages away from home have risen by 18 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, with several bumps in the road to recovery attributable to surges in Covid infections.