WASHINGTON – Eating and drinking place sales totaled a seasonally-adjusted $39.3 billion in August, according to preliminary data from the U.S. Census Bureau. This was roughly on par with the sales level of the previous five months, and was 2.9% above the August 2009 sales level, said Bruce Grindy, the National Restaurant Association's chief economist.

“Although sales haven’t registered the steady month-to-month growth that we typically see during stronger economic periods, the fact that sales have held their ground during this latest challenging patch is an encouraging sign,” Grindy said. “Still, we will need to see some consistent incremental gains before we can label the recovery as having a firm foothold.”

August readings of producer and consumer prices were released by the Bureau of Labor Statistics (B.L.S.) and stated on the producer side, average wholesale food prices edged down 0.1% in August, after increasing in 10 of the previous 13 months.

“Although wholesale food prices posted a modest decline in August, they are on pace in 2010 to easily wipe out the 3.8 percent drop registered in 2009,” Grindy said. “Coming on the heels of even stronger gains posted in 2007 and 2008, food prices remain extremely elevated, which puts additional pressure on restaurant operators’ margins in a challenging business environment.”

Menu prices in August grew at their strongest rate in 16 months, according to B.L.S. data. After eight consecutive months in which menu prices either rose 0.1% or remained flat, menu prices rose 0.3% last month – their strongest single-month gain since April 2009.

“Despite the stronger gain posted in August, restaurant operators have been extremely reticent to increase menu prices in the current economic environment, as they compete for consumers’ limited disposable income,” Grindy said. “Overall, menu prices gained just 1.2% in the 12 months ending August 2010 – just one-tenth of a point above the lowest growth posted in more than five decades.”