The restaurant industry became the largest retail sector in 2015.Savvy property owners and developers are cognizant of a simple fact: the restaurant industry is booming, and it shows no signs of slowing down. While that fact has entered the realm of common knowledge, an actual look at the numbers still offers some eye-popping results. According to Pymnts.com, the restaurant industry became the largest retail sector in 2015.
A recently released report from CBRE entitled “Now Serving Retail Growth” provides some more detail on just how much the restaurant industry has moved the needle in recent years.
“For the past few years, the restaurant category (classified as ‘food service and drinking places’ by the U.S. Census Bureau) has been a clear outlier from other retail segments. Between 2012 and 2015, the restaurant segment not only grew more than any core retail category, it also showed the clearest and most consistent acceleration — a key indicator of growth potential,” the study reads in part.
In 2015, restaurants staked claim to 15% of all retail sales, surpassing for the first-time ever the sales of grocery stores, which checked in at 14%.
“While economic recovery, job and wage growth, lower fuel costs and reduced household debt have all helped drive consumer spending in recent years, there is mounting evidence that the growth in restaurant sales has more to do with fundamental lifestyle changes than purely cyclical trends,” the study continues.
The industry took a hit along with other retail segments during the recession of 2008, but it has come back with a fury to top the charts of retail sales. Restaurant sales grew at a 37% clip from their pre-recession peak in 2015, and the growth shows no signs of slowing down. Data from the Bureau of Economics Analysis shows that spending on meals outside of the home grew at a faster rate than consumer spending on goods, services or food at home last year.
“These three factors, along with growth acceleration of the past three years, suggest that spending increases may be more than just a sign of post-recession recovery but, additionally, a reflection of fundamental shifts in how and what U.S. consumers spend on food,” CBRE’s report says.
Primary spenders in the restaurant industry continue to be baby boomers, but the millennial generation is expected to be a key driver of future growth. All of this growth continues to spur developers and landlords to open up space to traffic-driving restaurants, and the concept of restaurant as anchor continues to play out in shopping malls and mixed-use developments across the nation.