Apr 19, 2023 - News

Michigan restaurants report major sales increases

Data: U.S. Census Bureau; Chart: Tory Lysik/Axios Visuals

We're spending more money at restaurants than on groceries — and the gap is widening.

Why it matters: Prices are rising at both grocery stores and restaurants, leaving Michigan consumers few options for saving money amid a local affordable housing crisis and an end to extra food assistance put in place during the pandemic.

  • But restaurants, especially small businesses, have also faced a tough couple of years with rocketing operating costs and staffing problems.

What's happening: Nationally, people spent 20.7% more at restaurants than on groceries in 2022.

By the numbers: Put another way, U.S. consumers spent about $130 on dining out for every $100 they spent on groceries to start the year.

  • Restaurant spending rose 13% in March compared with a year earlier, outpacing retail's overall 2.9% gain, the Commerce Department reported last week.

Between the lines: Despite inflation, a majority of restaurants are also reporting a recent increase in both diners' spending and traffic.

  • Around 75% say their sales increased year over year as of February, per restaurant association data.
  • Just 12% reported lower sales.
  • Meanwhile, 51% of restaurants reported higher traffic year over year, with 31% reporting lower traffic.

What they're saying: "The (restaurant) industry has endured myriad challenges and an inflationary environment that has forced fairly dramatic menu price increases over the last two years, but demand continues to surge nonetheless," Justin Winslow, CEO of the Michigan Restaurant and Lodging Association, tells Axios.

  • "The means by which the public consumes restaurant food has shifted somewhat, but the restaurants that survived the pandemic are nimbler than ever at meeting demand for increased convenience or a special experience."

Flashback: It wasn't long ago that Americans spent more on groceries than at restaurants, even if you ignore the pandemic.

  • Over the last 10 years nationwide, groceries topped restaurants in every month of 2013 and 2014 and into early 2015.

Go deeper: How food inflation has affected Detroit in the last couple of years is exemplified by the increase in prices of coney dogs.


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