Restaurant sales drop for the second straight month in January

Joanna Fantozzi

Restaurant sales continued to fall for the second month in a row in January, as the U.S. hit the peak of the COVID-19 omicron variant outbreak, according to the latest data from the U.S. Census Bureau. Restaurant sales peaked in November at $73.1 billion, before declining to $72.7 billion in December and $72 billion in January, representing the lowest monthly sales volume since June 2021.

This dip in “eating and drinking places” sales did not match the rest of the retail industry sales, which rose 3.8% in January, beating expectations. Restaurant sales are back down to below pre-pandemic levels, which in the second half of 2019 to the beginning of the pandemic never dropped below $72.5 billion in November 2019.

“Yesterday’s sales numbers highlight the unique and devastating impact restaurants continue to feel from the pandemic,” Sean Kennedy, executive vice president of public affairs with the National Restaurant Association said in a statement. “While most of the economy showed growth in January, restaurant sales were down for a second month in a row; after adjusting for inflation, sales were nearly $3 billion below mid-2021 levels.”

According to the National Restaurant Association’s January survey of 4,200 restaurant operators, restaurants are feeling the significant omicron (and labor, and supply chain)-related drop in sales. More than half of restaurants shortened operational hours and 34% began closing on days they would normally be open. On top of that, recent data from the U.S. Department of Labor found a 12.8% increase in food prices this year, which the Independent Restaurant Coalition says is unsustainable restaurants that are already struggling.

Related:U.S. restaurant sales forecast to hit $898B in 2022, reports National Restaurant Association

Both the Independent Restaurant Coalition and National Restaurant Association, as well as other restaurant advocates are vying for more restaurant relief, which has been rumored multiple times now but never come to fruition.

“Small business restaurants aren’t like other small businesses,” Kennedy said. “Even in the best of times, they’re performing a balancing act to provide outstanding service and make ends meet. Thousands of these restaurants were left in limbo when the Restaurant Revitalization Fund closed, and without the replenishment, there’s a good chance we’ll start seeing many of them close.”

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