Restaurant Spending Tops Pre-Pandemic Level, Office Use Ticks Up After Spring Holiday, Trade Deficit
Restaurant Spending Tops Pre-Pandemic Level
Hungry customers are heading back to restaurants after more than two years of avoiding indoor spaces, with customer spending nationally now surpassing February 2020 levels by nearly 10%, according to a new report from brokerage JLL.
Researchers noted overall March spending on dining out, adjusted for inflation, was 9.7% ahead of the figure for March 2020 at the start of the pandemic in the United States. While the numbers may encourage more developers and operators to expand their real estate, it’s clear the pandemic is not finished with full-service restaurants.
Citing sources including the Census Bureau, reservation service OpenTable and research firm IBISWorld, JLL reported that foot traffic for full-service eateries was still down nearly 10% from 2019 levels as of January of this year. However, that’s still good news for the industry compared with the 86% drop-off in customer traffic that was seen in April 2020.
“No segment suffered more than full-service restaurants during the pandemic,” said the JLL report issued Wednesday. “Inside dining was restricted or severely limited for months, and limited capacity rules severely impacted sales in an industry with already thin margins.”
The industry is still struggling with labor, food and other supply cost inflation spurred largely by the pandemic, but some U.S. regions are faring better than others amid the apparent recovery. JLL said Sun Belt states like Florida and Texas have recovered “a good deal faster than other regions,” thanks to factors including year-round outdoor dining and, in many cities, fewer pandemic business restrictions than those seen in East and West Coast urban hubs.
For instance, the number of seated diners in March 2022 was up 35% from March 2019 in Miami, up 27% in Austin, Texas, and up 12% in Houston. In contrast, that number was down 46% in Seattle, 45% lower in San Francisco and 44% lower in New York City.
Office Use Ticks Up After Spring Holiday
The latest weekly numbers from security services firm Kastle Systems showed the percentage of workers now back in big-city offices rose in the last week of April, after a brief lull spurred largely by the Easter holiday season and spring break travel.
Based on anonymous keycard data from properties using its system, Kastle reported that the average for the 10 largest tracked cities was 43.4% for the week ended April 27. That was up nearly 3 percentage points from the prior week.
All 10 of the cities included in Kastle’s official Back to Work Barometer saw rises in occupancy from the prior week, with Houston showing the biggest gain at 4.8 percentage points, to reach 55.7%. New York City rose 4.5 points to reach 37.4% but like most major cities has yet to crack the 50% mark since the start of the pandemic.
Trade Deficit Hits Record High
The nation’s international trade deficit reached a record $109.8 billion in March, a sign that the U.S. is still struggling with inflation and supply chain disruptions as imports outpaced exports.
The Commerce Department said Wednesday that the March deficit, which tracks the value of goods and services, was up from a revised $89.8 billion in February. March exports rose 5.6% from the prior month to $241.7 billion, while imports rose 10.3% to $351.5 billion.
Real estate brokers and analysts have noted that trade deficits create uncertainties about demand for manufacturing-oriented industrial properties because domestic production trails the flow of goods brought into the United States.
However, demand for distribution-related real estate in particular has been rising over the past year, as companies look to speed delivery times by relocating logistics operations to the U.S. from overseas locations still experiencing pandemic disruptions, especially in Asia.