Both consumer spending and restaurant industry health are closely watched indicators of the national economy. Consumer spending accounts for 70 percent of economic growth, and the food-service industry, which employs 10 percent of the U.S. workforce, is highly dependent on the consumers’ discretionary spending.
The Commerce Department reported Monday that consumer spending increased just 0.3 percent last month after a 0.9 percent gain in February.
For the January-through-March quarter, consumer spending rose 2.9 percent — the fastest pace in more than a year. But some people may be cutting back because of the weak income gains and a sharp reduction in hiring last month, according to the Associated Press.
“Real incomes will need to grow at a faster rate to prevent consumption growth from slowing,” Paul Dales, senior U.S. economist at Capital Economics, told the AP.
Shanon Morgan, president of the Miami Valley Restaurant Association, said many restaurant chains have been offering discounts and other deals that may be driving up national sales numbers. “I still think people are hanging onto their money,” Morgan said.
Dan Young said his optimism is based on his customers’ frame of mind and what kinds of things they’re buying as well as his greatly improved bottom line so far in 2012.
“It’s hard to describe, but it’s their mood,” Young said of his customers. “People just feel more confident, I think. They’re not all-in, but they’re feeling better about going to a restaurant one more time this month.”
Other restaurant owners across the country apparently share Young’s optimism. The National Restaurant Association’s Restaurant Performance Index (RPI) matched its post-recession high in March, the association announced Monday. The RPI — a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry — stood at 102.2 in March, up 0.3 percent from February and equaling its post-recession high that was previously reached in December 2011. In addition, the RPI stood above 100 for the fifth consecutive month in March, which signifies expansion in the index of key industry indicators.
“The first quarter finished strong with a solid majority of restaurant operators reporting higher same-store sales and customer traffic levels in March,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “In addition, restaurant operators are solidly optimistic about sales growth and the economy in the months ahead.”
Restaurant operators reported positive same-store sales for the 10th consecutive month in March: 65 percent of restaurant operators reported a same-store sales gain between March 2011 and March 2012, up slightly from 63 percent who reported a sales gain in February. Restaurant operators are also generally optimistic about the direction of the overall economy, and for the sixth consecutive month, restaurant operators reported higher expectations for staffing levels in the months ahead.
Haverstick, of Jay’s Restaurant, said she has spoken with other Dayton-area restaurant owners who also had “excellent” months in January and February, driven by mild winter weather as well as arts and theater events in downtown Dayton. But the unseasonably warm weather in March seemed to have the opposite impact, as diners apparently stayed home to work in their yards, and sales dropped, Haverstick said.
But Haverstick also is optimistic about the future. “May is always a positive month,” she said. “There’s the University of Dayton graduation, Mother’s Day, and the Hamvention coming into town.”
Contact this reporter at (937) 225-2258 or mfisher@DaytonDailyNews.com.
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