During a recession, cutting discretionary spending is one step consumers take to deal with their uneasiness. Since it's just a matter of will and not need, cutting non-necessity expenditures is one of the last temporary behaviors to change once the recovery begins. Dining at restaurants is perhaps the quintessential kind of discretionary spending that gets hit when consumers pull back: for most Americans, it's easy enough to get cheaper food at the grocery store and cook. Yet recent data shows that even the market for dining out appears to be improving.
Yesterday's retail spending numbers showed that expenditures at "food services and drinking places" increased in March. Spending was up 0.3% from February and increased 3.2% compared to a year earlier. Granted, the weather may have had something to do with it: no one wants to go out to eat when it's cold and awful outside, and March provided unusually delightful weather to much of the U.S.
But the New York Times reports on some additional data that shows March's improvement for restaurants might be more than a blip. One industry analyst the article quotes says that the month's sales gain may seem small, but it reversed 10 months of negative sales. It's hard to believe that only weather would have driven such a substantial change. The Times additionally notes that hiring began in the first three months of 2010 in the food service industry, after layoffs plagued the sector for all but three the 25 months of the recession prior to this year.