by Ben Leubsdorf, via WSJ |
U.S. consumers are spending more at restaurants as gasoline prices fall. Department stores, not so much.
The national average price for a gallon of regular gas was $2.91 on Friday, according to auto club AAA. That was down from $2.95 a week earlier and $3.19 a month ago. A sustained decline in gas prices should free up money for Americans to spend on other items, providing a boost to the retail sector headed into the holiday shopping season.
Restaurants did well in October. Seasonally adjusted sales at food services and drinking places rose 0.9% from the prior month, up from a 0.7% gain in September and the category’s biggest one-month gain since May, theCommerce Department said Friday in its monthly retail sales report.
At Freddy’s Frozen Custard & Steakburgers, a Wichita, Kan.-based restaurant chain with 129 locations, sales usually drop as summer turns to fall. But this year, the autumn decline has been more gradual than usual, said chief executive Bill Simon.
Gas prices, he said, could be a factor. “It certainly affected us on the way up,” Mr. Simon said, when rising fuel costs prompted many consumers to curtail spending on restaurant meals. Now, he said, he’s noticed longer lines and more crowded parking lots.
He added, “If there isn’t a raised optimism, there is at least a reduced pessimism out there.”
Not feeling the love: department stores, where sales last month fell 3.5% from a year earlier. Sales dropped 0.3% in October on top of a 1.1% decline in September.