Tax Cuts Fail To Stimulate Restaurant Sales

Same-restaurant sales fell 0.3% in January, ending three straight months of flat or positive growth.

MarketWatch reports Restaurant Sales Fall in January as Tax Overhaul Fails to Boost Spending.

After three months of flat or positive sales growth, the restaurant sector saw same-store sales fall 0.3% in January, according to data from industry tracker TDn2K. That’s bad news for a sector that was mired in recession until late last year, as consumers confronted higher prices for everything from rent to medical bills.

The data are based on TDn2K’s tracking of weekly sales from more than 30,000 restaurant units, representing more than 170 brands and $68 billion in annual revenue.

Joel Naroff, president of Naroff Economic Advisors and economist at TDn2K, said tax cuts should start to boost restaurant attendance soon. “Stronger growth in the 3% range looks likely this year and into 2019 as consumers spend the extra money in their paychecks and businesses increase their capital spending,” he said.

One bright spot in the January numbers was a positive performance for fine dining and upscale casual, the two segments that have outperformed for the last year. Business-related dining contributed to the climb in fine dining.

TDn2K vs Census Bureau

The lead-in Census Bureau chart from Fred shows year-over-year sale, not seasonally adjusted.

Here is a month-over-month comparison.