According to the National Restaurant Association, the restaurant industry wrapped up 2014 on a positive note, with sales and employment levels registering solid gains in December. While challenges remain, the industry enters 2015 with a generally positive business environment due in large part to an improving labor market and dampened gas prices, according to the NRA's chief economist Bruce Grindy.
Restaurant sales continued to trend higher in December, as consumers took their savings at the pump and reallocated spending toward restaurants. According to preliminary figures from the U.S. Census Bureau, eating-and-drinking-place sales totaled $49.6 billion on a seasonally-adjusted basis in December, the eighth consecutive monthly increase and strongest volume on record. In contrast, overall retail sales (excluding foodservice) fell 1.1% in December.
The recent run of strong restaurant sales gains coincided with the sharp decline in gas prices, which fell more than $1.40 during the last six months of 2014. December's restaurant sales volume of $49.6 billion was more than $2.3 billion above June's seasonally-adjusted volume, an increase of 5 percent.
While challenges remain - most notably elevated food costs - the restaurant industry enters 2015 with a generally positive business environment, said the association. “The tailwinds of an improving labor market and dampened gas prices should continue to reinvigorate consumers and help them break out of their recession mindset. To be sure, if the economic fundamentals continue to improve, 2015 has the potential to be a breakout year for consumers,” the association said.
Meanwhile, traffic to the on-premise channel was up a strong +1% in the final 4 weeks of 2014, above the rate (0.7%) for full year 2014 with a sequential improvement each of the last several quarters, according to market watcher GuestMetrics. Traffic was up the strongest in the casual dining segment, up 1.7%, well above the 0.4% full year decline. Even Bar/Club traffic was up 0.8% after declining 1.9% for the full year.
Overall food and beverage sales to the on-premise were up 3.6% in the latest 4 weeks after rising 2.2% for full year 2014. “We've also seen improvement in beer and spirits trends,” said the report. Beer volume was down 1.9% in the final 4 weeks vs. down 3.4% on the full year. Spirits volume was up 0.9% in the final 4 weeks vs. down 0.3% for the full year. Wine volume was down 1.3% vs. down 0.9% on the full year.
Beer price/mix was up 3.1% in the latest 4 weeks vs. 2.5% for wine and 2.5% for spirits. For full year 2014, beer lost 0.7% share of units, wine was flattish at up 0.1% share and spirits gained 0.6% share of volume. On a dollar basis, beer sales lost only 0.3% share, wine lost 0.1% share and Spirits gained 0.4% share.
In the final 4 weeks of the year, craft beer gained 1.2% share (much lower than the 1.9% full year share gain). Premium Light lost 1.5% share points in the last 4 weeks vs. down 1.9% on the full year. Imports lost 0.3% while Cider gained 0.4% share in the final 4 weeks.
For spirits, bourbons/blends were the bigger winner in 2014, gaining 2.8% share while vodka lost 1.2% share and rum lost 0.6% share.