For the first time since 1992, sales at food establishments surpassed spending at the grocery store in March. The surge in spending on food away from home is positive for the meat sector, especially after a sluggish start to the year due to harsh winter conditions in heavily populated areas.
The U.S. Census Bureau reported that restaurants and bars sales penciled to $150.4 billion in the first quarter, marking the first time on record for sales to reach $150 billion level. In addition, sales volume in the first quarter of 2015 is up 4% from fourth quarter of last year.
In the latest Oklahoma State University Food Demand Survey, consumers weekly spending on food eaten at home was virtually unchanged from April at $91.68 whereas spending away from home increased by 4% over last month.
Overall, consumers expect lower meat prices to greet them at the meat counter, especially as the rise in pork and chicken production is being publicly reported.
As result, the consumers’ willingness-to-pay (WTP) fell for pork products between 6-10% while WTP for beef and chicken actually climbed.
The WTP for pork products fell this month to $3.97/lb. for porkchop, compared to $4.25 last month. However, it is 20 cents more than the same consumer would have paid a year ago. Similar, consumers indicated a WTP of $2.51/lb. for deli ham, down 28 cents from March but up 9 cents from last year.
Still, the more affordable pork prices will spark restaurant operators to feature the animal protein at time when the outlook for restaurant sales is positive for the rest of the year.
According to the National Restaurant Association, 59$ of the operators expected higher sales in six months with only 4% anticipating lower sales. This gap of 55 percentage points represented restaurant operators’ strongest level of sales optimism in more than 10 years.