Growth in Higher-Income Households Bolsters Restaurant Sales
According to the National Restaurant Association, the number of households with income above $100,000 jumped 29% during the last seven years. That's got to be positive news for beef demand, as well.
Higher-income households are critical drivers of growth in the restaurant industry. According to data from the Bureau of Labor Statistics, households with annual income of at least $70,000 were responsible for 63% of total restaurant spending in 2018. This despite representing only 40% of all households in the United States.
The good news for restaurants is that the number of higher-income households rose steadily in recent years. According to data from the U.S. Census Bureau, there were 39.1 million households with annual income of $100,000 or higher in 2018. This was a record high, and represented an increase of 29% from the 2011 level, after adjusting for inflation.
Households in the $75,000-to-$99,999 income bracket were the second-fastest growing category in recent years, with their numbers rising 12% between 2011 and 2018. In total, there were 10.5 million more households with income above $75,000 in 2018 than there were in 2011, after adjusting for inflation.
The recent steady upward trend is important, because the number of higher-income households shrunk as a result of the Great Recession. After reaching a cyclical peak in 2007, the number of households with income of at least $100,000 fell 6% by 2011. During the same four-year period, the number of households in the $75,000-to-$99,999 income bracket declined 3%.
If the positive trend in higher-income households continues, it bodes well for restaurant sales growth in the years ahead.