Restaurants and bars had a huge month in January.
On Thursday, the January report on retail sales showed food services and drinking places saw the biggest year-over-year jump for any kind of business, as sales increased 11.3%.
Over the prior month, sales at food and drinking places rose 0.8%.
And these figures confirm something we highlighted earlier this week, which is that restaurants haven’t been doing this well in almost 10 years.
Torsten Sløk, an economist at Deutsche Bank, noted that the decline in oil prices has helped the restaurant sector, with the restaurant index rising to its highest level since 2005-2006.
Meanwhile, the retail sales report was a huge miss all around, falling 0.8% versus the expectation of a 0.4% decline. Gas stations saw the biggest decline, with sales falling 23.5% over the prior year.
Overall, retail sales fell 0.8% and declined 0.9% when excluding auto sales, both of which missed expectations. Excluding auto and gas sales, retail sales rose 0.2%, which was also below the 0.4% expected by economists.
Following the release, Pantheon Macroeconomics’ Ian Shepherdson said in a note: “We expect a surge in sales over the next few months, as the lagged effect of the drop in gas prices works through.”
Here’s the chart Sløk sent the other day, and despite some softness in Thursday’s report, this trend appears to still be in tact.