Confident in the economy or not, American consumers are going out
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Consumer confidence decreased in February for the second straight month, according to an index from think tank the Conference Board. But whether they’re feeling confident or not, American consumers are going out. And that’s out with a capital O-U-T.
Sales at restaurants and bars were up around 7% in January from December (and up around 25% from last January), according to recent retail sales numbers. Are people just living for the moment no matter their worries about the future?
Consumers like Dale Cook are eating lunch out on a daily basis. He can be found enjoying crab soup, a burger and a business meeting outside Kooper’s Tavern in Baltimore.
“I had a manager tell me a long, long time ago, when I first got into business, when you’re paying for someone’s lunch, it’s a whole lot harder for them to say no,” Cook joked.
A lot of people are paying for meals out these days, which at one point, was logistically or financially out of reach. Now it seems like a priority for many Americans.
Inside Kooper’s, it was bustling. Lineth Rivera, 24, poured iced tea and soda and is dreaming of an even busier season ahead.
“I’m hoping that it’s super busy, super busy that I can’t even think,” she said.
Rivera is a mom and a part-time nursing student who said she only goes out only once a month.
“But on that day I will go all out and then spend just as much as I would spend once a week,” she said with a laugh.
That kind of pent-up demand is part of what’s driving this increased spending at bars and restaurants, according to Aditya Bhave, an economist at Bank of America.
“If you, before the pandemic, were eating out twice a week, and then you never got to eat out during the pandemic, you could go through a period where you eat out three times a week,” he said.
And Bhave said the question is whether this is a short-term celebratory period or a new way of spending.
The National Restaurant Association, a trade group, is feeling positive: it has a report out today providing outlook for the year ahead.
“In 2023, restaurant industry sales will actually reach a record high of $997 billion, which is up 6.4% over 2022,” said Hudson Riehle, Senior Vice President of Research with the group.
Back outside Kooper’s Tavern in Baltimore, customer Andrew Ross said he feels obligated to spend in that way after seeing restaurants close during the pandemic.
“It was really sad [to see] all these local businesses just going away,” Ross explained. “And so now it feels more incumbent on us to kind of use them since they’re available.”
He said it’s important to maintain social spaces in his community. They’re worth the price of a burger and some crab soup.
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