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The Rise of Restaurants & Online Retailing

5/23/2018

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I found this really interesting chart from the St. Louis Federal Reserve while doing research for a presentation I'll be giving later on this year.  It's a bit hard to make out, but what it says is that the general estimated sales for "General Merchandise Stores" (read your Wal-Marts and the like), which for the better part of 10 years was the dominant retail category, fell behind "Food and Beverage stores" in 2014.  What's really shocking though, is that neon blue line, which is "Food Services and Drinking Places" (aka restaurants and bars), which has exploded in growth nationally.  In 2009, that sector accounted for about $38bn in sales - today that number is $58.5bn - and growing.  But also, pay very close attention to that black line - "Nonstore" retailers - aka your online Amazon stores and the like.  What was a $25bn industry in 2009 is today more than double that, at almost $56bn.  

For decades, Americans spent more on food than they did on anything else - and then the superstores came into vogue and there was a shift in spending away from food/drink stores until the early 2010's.  Now, it seems that either restaurants or online shopping will overtake groceries as the top retail category in the US by 2020.   But things do go up and down, and people will always have to buy groceries - right?

Personally I think we're starting to see the peak of the hill of online retailing.  Not at the top - I still think that's at least 5-6 years away - but I feel the rapid growth stage is ending.

What do you think?  Do you think we're reaching the permanent end of groceries as the dominant retail category?  Will Amazon own EVERYTHING?  Will we ever get to "peak restaurant"?  Post your thoughts in the comments!
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