Fewer Wealthier Households A Key Factor In Restaurant Doldrums

One of the critical realities of the foodservice business is that richer households buy a significant percentage of restaurant meals. And one of the unfortunate effects of the Great Recession is that there are significantly fewer affluent households today than there were in 2007—some 2 million fewer, according to the National Restaurant Association’s Chief Economist Bruce Grindy.

According to Grindy’s analysis of U.S. Census Bureau data released in September, as well as data from the Bureau of Labor Statistics, 37% of all foodservice spending can be attributed to households earning $100,000 or more a year. Another 19% of spending comes from households with incomes in the $75,000 to $99,999 range. The number of household in both demographics declined by 5% in the period from ’07 to ’10, the Census Bureau data shows, a total loss of 2 million households in those wealthy demographics. In ’10, real median income declined for the third consecutive year, falling 6.4% to $49,445.

As Grindy puts it, with an economist’s typical alacrity, “the recent shift in household income will potentially impact spending patterns within the industry.”

 

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