Food Service Sales Update – Feb ’22
Executive Summary
U.S. grocery store and food service & drinking place sales remained significantly above pre-pandemic levels through Dec ’21, although both have declined from recent levels on Omicron concerns. Important points to consider include:
- U.S. grocery store sales declined to a three month low level throughout Dec ’21 but remained significantly above pre-pandemic seasonal levels for the 22nd consecutive month. Food service & drinking place sales declined to a four month low level throughout the month of December but also remained significantly above pre-pandemic seasonal levels. Dec ’21 combined grocery store and food service & drinking place sales declined to an eight month low level when adjusted for inflation, finishing 0.6% below pre-pandemic trendline figures.
- The National Restaurant Association’s Restaurant Performance Index declined slightly from the previous month throughout Dec ’21 but remained in an expansionary state for the 11th consecutive month. The RPI Expectations Index, which measures restaurant operators’ six-month outlook on industry indicators, rebounded to a five month high level throughout Dec ’21.
- Seated diner figures provided by OpenTable declined to a nine month low level throughout Jan ’22, finishing 23.7% below pre-pandemic levels.
Grocery Store & Food Service Sales
COVID-19 has resulted in a pronounced divergence in grocery store and food service & drinking place sales. Grocery stores sales reached a record high monthly level throughout Mar ’20 as many stocked up on staples in anticipation of lockdowns while food service & drinking place sales declined to a 16 year low level throughout Apr ’20 as stay-at-home orders were placed.
Grocery store sales have remained significantly above pre-pandemic seasonal levels over 22 consecutive months through Dec ’21. Dec ’21 grocery store sales declined to a three month low level but finished 8.2% above the previous year and 17.2% above pre-pandemic seasonal levels. 2020 annual grocery store sales finished 11.3% higher on a YOY basis, while 2021 annual sales increased by an additional 4.0%.
Food service & drinking place sales remained below pre-pandemic seasonal levels over 12 consecutive months through Feb ’21, prior to fully rebounding over the ten most recent months of available data. Dec ’21 food service & drinking place sales declined to a four month low level but remained 41.3% above previous year levels and 10.2% above pre-pandemic seasonal levels. 2020 annual food service & drinking place sales finished 19.4% lower on a YOY basis, reaching a six year low level, prior to rebounding by 31.4% throughout the 2021 calendar year.
Dec ’21 combined grocery store and food service & drinking place sales declined to an eight month low level when adjusted for inflation, finishing 0.6% below pre-pandemic trendline figures. Combined grocery store and good service & drinking place sales had finished above pre-pandemic trendline figures when adjusted for inflation over seven consecutive months through Nov ’21, prior to finishing lower throughout the month of December.
Restaurant Performance Index
The National Restaurant Association’s Restaurant Performance Index (RPI) declined slightly from the previous month throughout Dec ’21 but remained in an expansionary state for the 11th consecutive month, finishing at a level of 104.2. The RPI is a statistical barometer that measures the overall health of the U.S. restaurant industry. A value above 100 signals a period of expansion while a value below 100 signals a period of contraction, with the distance from 100 signifying the magnitude of the expansion or contraction.
The RPI reached a record high level of 106.3 throughout Apr ’21 and has remained within an expansionary state since. The elevated RPI continues to overstate the current health of the U.S. restaurant industry, however, due to dampened year-ago comparisons for indicators such as same-store sales and customer traffic indicators. 84% of restaurant operators indicated customer traffic was above previous year figures throughout Dec ’21, while 89% of restaurant operators reported higher same-store sales. Two-year comparisons remain mixed, with 42% of restaurant operators saying their Dec ’21 sales were up from Dec ’19 levels.
The RPI has indicated that the U.S. restaurant industry expanded over three and a half consecutive years through Feb ’20, prior to contracting throughout 11 consecutive months through Jan ’21. RPI figures reached record low levels throughout Mar-Apr ’20, consistent with the declines experienced in food service & drinking place sales. RPI figures have been provided since early 2002.
The RPI has exhibited a moderate correlation with domestic cheese demand, historically, as the restaurant industry has been a main source of consumption growth. The correlation in the RPI and YOY growth in domestic cheese demand was most pronounced following the financial crisis of 2008, when both declined significantly, each reaching record low levels on a 12-month rolling average basis. Similar declines were exhibited within the early stages of the COVID-19 pandemic, with each metric rebounding since.
The RPI Current Situation Index, which measures current industry trend indicators, finished at a three month low level of 105.2 throughout Dec ’21 but remained elevated, overall. The RPI Current Situation Index had ranged from values of 92.8 – 96.8 from Mar ’20 – Feb ’21, prior to reaching record high levels over more recent months.
The RPI Expectations Index, which measures restaurant operators’ six-month outlook on industry indicators, rebounded to a five month high level throughout Dec ’21, reaching a level of 104.4. 67% of operators expect their sales volume in six months to be higher than it was during the same period of the previous year, reaching a five month high level. 40% of operators expect economic conditions to improve in six months, reaching a six month high level.
OpenTable Seated Diners
Total U.S. seated diner figures provided by OpenTable exhibited a similar pattern to the food service & drinking place sales throughout 2020. Seated diner figures showed YOY restaurant activity steadily rebounding from the Apr ’20 lows through the month of September, prior to finishing flat-to-lower throughout the final quarter of the calendar year.
More recently, declines in seated diners have subsided as figures have steadily rebounded throughout the first half of 2021, prior to remaining slightly below pre-pandemic levels over the second half of the calendar year. When indexed to 2019 levels, Jan ’22 seated diners returned to a nine month low level, however, finishing 23.7% below pre-pandemic seasonal levels.
TSA Checkpoint Travel Numbers
Monthly TSA checkpoint travel numbers, a data series tangentially related to the rebound in food service sales, reached a 17 month high level throughout Jul ’21 prior to declining seasonally throughout the past six months. Jan ’22 TSA checkpoint travel numbers remained sharply above previous year figures for the 11th consecutive month but finished 25.9% below 2020 seasonal levels. The deviation in TSA checkpoint travel numbers from pre-pandemic seasonal levels was the largest experienced throughout the past seven months.