More Americans staying home; bar, restaurant visits drop
"The furor for going out to dine is losing steam," says Wells economist Aleman
"American families are increasingly choosing to eat and drink in today, rather than eat and drink out," writes Eugenio Aleman, senior economist at Wells Fargo Securities in Charlotte, citing new data from monthly retail and food services sales tracked by the Bureau of Economic Analysis. See the summary report and charts here.
That trend has flattened. Americans spent $10.60 of every $100 they paid in retail establishments in restaurants and bars in June, down from $11.20 in December. They spent $11.80 per $100 in food stores. Those numbers have stopped converging, at least for now.
When jobs get scarce, both grocery and restaurant spending drop, he said. But when the economy is growing, one sector typically grows faster for a time -- as if responding to a new lifestyle trends: "For now, it seems that the furor for going out to dine is losing steam."
Still, bars are, on average, a little less crowded: "The weakest sector has been drinking places, which is down 2.2% in real terms from the end of last year." Full-service restaurants and take-out joints also report "a noticeable deceration in growth."
The one bright spot is a sector many Philadelphia restaurants think of as cheap-threat competition: Food-truck sales (the government calls them "special food services") "is the only category that has improved since last year, rising 1.8%."
Aleman and his writing partner economist Michael A. Brown don't try to explain the drop in their report except to the extent they note the labor-market implications: Restaurants and bars employ more people, per dollar spent, than food and beverage stores.
So, by eating and drinking at home, Americans are creating "downside risk to employment growth," Aleman concludes.
Does that suggest a labor-market reaction, at a time when low-wage labor has been getting scarce and wage rates going up, at least in big East and West Coast metro areas? Aleman warned against reading too much into that, noting the government's data isn't broken down by city.