Our economists noted last week that September’s overall restaurant sales data was solid, carrying a near-record percentage of total retail sales. David Maloni, chief economist at ArrowStream, points out in the chart that this has been a building trend for some time.

"Some of that has been due to a declining share of total retail sales going to grocery," said Maloni. "Yes, we know, restaurant menu prices have been rising much faster than grocery store food prices with the premium in menu prices at record levels. And this could be viewed as concerning for the restaurant industry."

What Are the Future Implications? 

"So far, there is little indication that this is negatively impacting restaurant sales," said Maloni. "It is likely that restaurants will continue to capture a growing share of the consumer. But competition for that share within the industry will almost certainly remain intense."