May 21, 2013
Americans seem to be fed up with frugality.
As the recession ever so slowly recedes, an increasing number of Americans say they are less frugal than they were a few years ago. At the same time, sales at restaurants are at an all-time high and at least one survey says consumers expect to spend more eating out as soon as their pocketbooks allow.
Sales at eating and drinking places in April reached $45.9 billion, a $200 million seasonally-adjusted increase from the previous high in December 2012, according to preliminary figures from the U.S. Census Bureau.
“Last month was a shock,” said Ryan Lowder, the chef and owner of the Copper Onion in Salt Lake City, where his sales were up 20 % over April of 2012. “The increase last month was killer. I’m not complaining.”
Lowder said some of April’s boost was likely due to better weather in Utah, but he’s also seen a trend in more spending overall, especially on alcohol. “We sell a $40 pinot and $60 bottle of Pinot. We’re selling more of the $60 Pinot. We’re seeing an increase,” he told NBC News.
The Copper Onion was not alone in posting great numbers for April.
“After totaling nearly $45.7 billion in December, eating and drinking place sales were dampened somewhat during the first three months of 2013, likely due in part to the impact of the payroll tax hike,” the National Restaurant Association’s Chief Economist Bruce Grindy wrote in his analysis of the numbers. Sales have steadily increased since dipping to $45.2 billion in February. Those numbers are expected to continue rising, according the restaurant group’s own survey.
In all, 49% of adults said they were not eating in restaurants as often as they would like, according to a national survey of 1,000 adults conducted April 25 to 28 for the National RA by ORC International. Women were more likely than men (54% vs. 44%) to want to dine out more often.
“These new survey results suggest that once consumers are feeling more confident about their personal financial situation, they will be primed to burn off some of their accumulated pent-up demand for restaurants,” Grindy wrote.
The restaurant numbers arrive at the same time consumers tell Gallup they are less frugal than they were a few years ago. Only 41% of Americans now say they are “spending less money,” compared with 57% in 2010, according to Gallup’s annual Economy and Personal Finance survey, which was conducted April 4 to 14.
In addition, 26% of Americans surveyed in April said they are spending more money than before, and 32% said it’s about the same. However, many of the Americans who are spending less say it’s their new normal. That’s especially true for individuals closest to retirement age. About 46 % of people in the 50- to 64-years-old, baby-boom age bracket say they are spending less.
It’s the bracket of 18- to 29-year old consumers that are most likely to open their wallets these day, with 33% telling Gallup they are spending more money than before.
Source: USA Today