FAH = food at home
FAFH = food away from home
So, eating out is killing our wallets. Not really a surprise considering "dollar menu" items at McDonalds now cost $6 and a halfway decent lunch is upwards of $17-20.
It's too hard to change habits in the short term, but I fully expect that over time people are going to start cooking more and cutting back on restaurant visits and the industry is going to take a huge hit because of it. Prices are simply out of control. Even more so considering the default tip expectation has crept up from 10% to now 20-25%.
Yea, it's crazy what eating out costs, and what having that same food delivered costs. It's damn convenient though.
>It's too hard to change habits in the short term, but I fully expect that over time people are going to start cooking more and cutting back on restaurant visits and the industry is going to take a huge hit because of it. Prices are simply out of control. Even more so considering the default tip expectation has crept up from 10% to now 20-25%.
I just bought stuff to make chicken quesadillas. It cost about $9 and I'll probably make at least 8 of them and have some chicken and tortilla left over after that. I can afford to eat out, but it seems like a ripoff and I just don't like getting ripped off.
No need to exaggerate. It's called the "$1 $2 $3 Dollar Menu" now, and in my expensive urban area, the priciest item on it is $3.19 (McDouble).
It's definitely not an actual dollar like it was twenty years ago, but it's sure not $6 either.
To see the real numbers, look at the annualized differential between 2019 and 2023.
There are a lot of efficiencies a burger joint, for instance, should be able to employ that a personal kitchen can't. It probably won't be cheaper, but it ought to be some fraction of minimum wage * the time investment of diy cooking[0]. Or at least on that order.
[0] ~minimum wage (plus payroll and etc.) being fair pay for burger flipping, and being that a professional kitchen can maintain a much higher throughput per person (e.g. a pro burger flipper in a real kitchen can probably make 10+ burgers in the time I would take to make one)
Cooking at home means going to the supermarket (or going online and ordering from the SM). If you have to cook for more than yourself, then you probably need to also put sometime into planning the meals for the week. And then of course there's the time to cook the meals. There's also cleanup. Also, let's not forget that there are plenty of people who never really learned to cook and now fear the kitchen.
Sure meals from the frozen section are an option but they're maybe only slightly less expensive than FAFH.
In any case, FAH takes time *and* effort. Perhaps not a lot of time + effort - and habit - but enough to make it easy to say, "F** it. Let's FAFH..."
If FAFH establishments start closing, local towns are going to turn into ghosts towns. FAFH is about the only thing left in a lot of cases; aside from web dispensaries.
People should have been FAH'ing long ago for health reasons and that obviously didn't workout at all.
There's a sort of gut instinct that going out is easier. After all, the sitting and ordering is a lot more passive than the prepping and cooking.
But time wise, it seems like getting in a car, driving, finding parking, walking, waiting for a table, and then the slow drawn out steps of getting drinks, appetizers and a meal over a long period of time, before repeating all the travel again... adds up to even more time!
Currently we're trying to eat at home 3 nights a week, and even that's hard. We don't want to eat the same thing for multiple days. If neither of us has time to cook, then a lot of time the ingredients are perishable and get thrown out (so now instead of spending money to go out, we're spending money on food to cook AND going out - it's a gamble).
I would even add, that I think, as a society we should move to towards eating out and delivery being the norm - It's like anything else, I specialize in Programming, my wife specializes in Medicine. When we order food - they specialize in that. It's way more efficient than us having to do it.
Eating at home is going to save you money compared to eating out. But eating at home costs have gone up a shocking amount as well.
I don’t see how. Written and video recipes available for free online. Instant pot and a couple other items cost $100?
Time and effort are the remaining ingredients.
And of course, habits are also just... habitual. If it's a habit to get to 9PM at night and think, "crud I need food, let me just order something quickly", that habit will still be difficult to break even if everything else is easy.
It's of course doable -- I basically never eat out or order food, I cook everything. But I understand why people don't. Cooking is something I have to plan around. It's annoying to want to make something and then look in the fridge and realize I forgot to buy an ingredient. And I only cook for myself, I don't have to manage a full family and kids.
But it is of course way cheaper and (depending on how you approach it) can be much healthier.
We can hope, but it seems unlikely to me that it would go quite like that. I'm pretty sure that once people are used to budgeting a larger share of their income on food, processed food companies and their retailers will happily soak up whatever gets trimmed from restaurant spending. There might be a net savings for those early to transition, but if it becomes a cultural trend, supermarket prices will just creep up to match the customary food budget.
Restaurants may lose, but food manufacturers and supermarkets will likely claw back the difference before they let it go back to families.
I think you're wrong starting here. People aren't used to budgeting a larger share of their income on food. They're blowing their budgets, and it's going to stop fairly soon, because they can't actually afford it.
> processed food companies and their retailers will happily soak up whatever gets trimmed from restaurant spending.
If consumers let them, yes. If I'm right (and the GP), consumers won't let them.
> There might be a net savings for those early to transition, but if it becomes a cultural trend, supermarket prices will just creep up to match the customary food budget.
This assumes that there's no competition in supermarkets, and that they are free to raise their prices independently of their costs.
> Restaurants may lose, but food manufacturers and supermarkets will likely claw back the difference before they let it go back to families.
This assumes the same. And, "before they let it go"? You have a very exaggerated sense of how much power and control they have.
As a hardline economist in academia, you can say that those are what matter to poverty or starvation because people will eventually become desperate enough to reject their lived culture and return to an alien world of basic foods, but policy makers need to be realistic and acknowledge that most people have no idea how to eat without branded processed foods, fast food convenience, etc. The cultural traditions that made simple foods practical have been lost from many families and those never-learned recipes and habits don't just restore themselves to people overnight when times get tough.
That inconvenient reality of what people actually eat needs to get folded into these economic models for them to actually report on what they intend to. Otherwise, the measures just speaking to a lost time and the smattering of rustic immigrants who still know how to live satisfyingly on traditional staples.
There's also that how we live has drastically changed since the 70s and 80s as well. These assumptions about how we eat were underpinned by the idea that there would be an adult at home, someone who had time to do the planning/thinking about, preparation, and implementation of eating with these "basic foods".
Now, with every adult in a household often working outside the house--and, as you get lower in income, spending more hours doing so--the processed foods and fast food offerings are the only way to get calories in a time-efficient way.
Your point about never-learned recipes is a good one because there are time-efficient ways to prepare food at home but that also implies needed equipment and skill, sometimes passed down from a previous generation, sometimes bought with money that people don't have. But there's little that can compare, timewise, with "just throw it in the microwave for 5 minutes" or "just grab something from a logo foodservice place on the way home". I think people intuitively understand this but there are trade-offs to be made in the moment.
That strikes a chord. How do you fix this piece though?
Is the 80s methodology more accurate or realistic? That's all that matters.
If this is under counting inflation then spending at restaurants is up even more. I guess people have money to spend and are enjoying the restaurant scene.
Edit: add data
Real personal income https://fred.stlouisfed.org/series/RPI
Groceries are up easily 20-30% over the last few years. Some items more, some have stayed kind of stable.
It's ludicrous.
Would anyone reading this say their grocery bill has gone down since 4 years ago??
The comments are literally data being "refuted" with anecdotes.
But the average person doesn't eat only eggs and meat, which is what the 6% reflects.
Beef on the other hand...
I think retailers would like us to believe these increases are just them passing through rising commodity prices from inflation, but I am increasingly convinced it is collusion, either implicit or explicit, to increase margins. The most compelling evidence this is happening seems to be Costco, which generally sets its prices at near-fixed 15% markup hasn't experienced nearly the same increases and is selling similar products at less than half of that price.
I think the entire thing is indicative of a growing disconnect between the cost of commodities and what consumers are paying due to increased consolidation and collusion among retailers.
I have a(n unsupported) theory that gung-ho retailers try out amazon from time to time, in an effort to expand. Maybe they hire someone who knows how to sell there. They price based on how they do in store, then after a few months do a reconciliation and realize how much money they lose due to amazon's ads/stocking/shipping costs. Then they raise prices.
Each time this happens, you see massive fluctuations upwards as they have to cover their cost + amazon's charges. Then a competitor gets a new ecomm/marketing/growth person who sees an "opportunity" because all the competition has priced things way too high. That person pitches leadership on how they can sell more items without much more effort ("thanks Jeff Bezos!"), but the actual understanding of how much it costs doesn't come until a couple of months later.
There's a very good chance much of that price increase is due to increase cost of shipping. Even if Amazon gives you "free" shipping - they're building that price into the price of the product... They're not eating the shipping cost on a low margin item like a cereal grain.
I can buy organic locally grown oats at my expensive local health food co-op for less than $2/lb...unchanged from years ago.
I would use a retailer known to keep margins as low as possible like Costco as a better gauge. I buy rolled oats all the time, and between Costco and Trader Joe’s, I have not noticed any pricing swings in oats.
The United States is almost 250 years old. "Ever" and you only looked at 30 years is some first-rate hand-wringing bullshit.
What this article really says is that we are spending more money on food not prepared at home, and food not prepared at home is more expensive, duh.
Does a US-centric version of a tool like this one exist?
The bucket of chicken meal at KFC is $36
McDonald's combo meals are $11 instead of $6
Lattes seem to be $2 more
Still spending almost double a week on groceries than I was 2 years ago
Honestly domino's is pretty good and is still $8 for a large carry out.
Honestly if you're okay with spending $40 for whatever pizza you like, it becomes redicously worth it to just cook it. Pizza is one of the cheapest foods to make.
For comparison I spend 10-20% more over the same time period in Virginia for groceries. It is certainly not double, not even close. But eating out has gotten rediculous.
I have cealiac's, so gluten free pizza is not cheap. So, I make GF pizza myself. I spend roughly $40 in total, and make 2 great full sized meat lover's pizzas - with everything on it - bacon, pepperoni, prosciutto, salame, cheese, pineapple, onions, peppers, chicken, etc. All in costs are about $20-22 a pie, probably 21-25 if you include large ingredients that are also used for other cooking (olive oil, eggs etc...) which is not cheap but not terribly expensive considering I make it for a group of 4-5 people, so the cost averages out to 10-11 dollars a person.
The only real statement we get is,
> From 2019 to 2020, every State and Washington, DC, saw decreases in inflation-adjusted, per capita total food spending.
But the overall graph featured near the top of the article's slope is steep enough, I think, that the per-capita number hidden somewhere in there is also increasing across the duration. If I've done the napkin math right, roughly $2k/person/yr to $2.7k/person/yr.
But the big graph as presented confounds the problem we want to see the data on (stuff is getting more expensive) with population growth.
I won't argue that it's harder and more expensive, it sure is, but millennials seem to prioritize it enough to do whatever it takes to own a home, so home prices keep going up.
Some highlights from these sources:
[1] Today the millennial homeownership rate is 43 percent, well below the rates of generation X (67 percent) and the baby boomer and silent generations (77 percent). An important feature of millennial homeownership that often gets muddled in the media conversation is that it is increasing, and with few minor exceptions, it has always been increasing. The oldest millennials turned 18 in 1999, and every year since then there has been a net increase in the number of millennial-owned homes. Since the Great Recession, the millennial homeownership rate has grown faster than any other, particularly in the last five years while the economy has expanded quickly. Today, millennials are the least likely to own a home, but they are the most likely to purchase one.
Millennial homeownership is rising, but it is rising slower than it did for previous generations. The chart below (see link) compares homeownership rates for each generation as they age
[2] If we isolate the effects of delayed household formation proxied by changes in marital composition (i.e., we assume the marriage rate was the same as in 1990), we find the hypothetical real homeownership rate would have been 39.1 percent, 9.8 percentage points higher than current levels. As of 2021, there are 44 million young adults ages 25 to 34, meaning there would be 4.3 million additional homeowners.
[1]: https://www.apartmentlist.com/research/homeownership-by-gene... [2]: https://www.urban.org/urban-wire/real-homeownership-gap-betw...
Food is just one component of the CPI so it's possible for food prices to increase a lot even while overall inflation remains low.
Americans eat out a lot because they are unbelievably rich.
Meanwhile, the legal requirement for paid parental leave in most places is 0 days. Paid sick leave? 0 days. Notice period for firing an employee? 0 days. Cost of 1 year at a 4 year university? $36,436 [6]. You get the idea.
We're rich compared to developing countries, but we're a far cry from "unbelievably rich".
[0] https://endhomelessness.org/homelessness-in-america/homeless... [1] https://www.worldometers.info/world-population/malta-populat... [2] https://www.census.gov/library/publications/2023/demo/p60-28... [3] https://www.census.gov/library/publications/2023/demo/p60-27... [4] https://www.anthem.com/individual-and-family/insurance-basic... [5] https://www.fool.com/the-ascent/research/average-monthly-exp... [6] https://educationdata.org/average-cost-of-college
Covid destroyed the restaurant work force, so it is no surprise fafh has skyrocketed as they struggle to compete for the shrinking workforce.
