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.
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.
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.
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.
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.
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.
1) It's less friction and any give point. Driving is easy when the reward is a meal. Driving is not so easy then the "reward" is the supermarket.
2) Is an event. It's exciting. It's an adventure. Again, compare than to the supermarket and cooking a meal.
At the objective level, your analysis is spot on. I do agree. I tend to not eat out or order out. But aside from myself - and yourself? - that's not how human decision-making and human behavior works.
The majority's decisions are driven by the quest for comfort.
Look at that first chart. He literally just adds a constant to the CPI data.
The third chart in the apartment list link ("Homeownership has been in decline for decades") is exactly the plot I wanted. That chart makes the gap not look so dramatic as either your numbers or the paragraphs surrounding the chart: millennials are within 10% of the boomers at the same age. For the youngest and oldest millenials it's more like 5%.
I'm curious how this has changed since the article's publishing in 2020. Anecdotally, I know a lot of millennials who bought their first home since, but I don't know how widespread that is.
I think some amount of gap is reasonable, especially for the 20s cohort: less likely to have kids, more likely to want to live in a big dense city. Looks like millenials are closing the gap once they hit mid 30s or so, right around when they have their first or second kid and move to the burbs or further. I just can't see being worried or upset about that.
Getting prepared food via DoorDash, I guess might be quicker, but you're still sitting there for 30-60 minutes in most cases waiting for it to show up. You can roast a chicken and vegetables in the oven in that time.
But you aren't sitting! You are doing other things. Spending time with a child, scrolling the internet, watching tv, playing a game, doing housework, and so on.
If you roast a chicken, you still need to prepare it. This takes time. You gotta wait for the oven to heat, and you might need a side. You might need to put them in the oven at different times - that chicken is going to take 1.5 to 2 hours, after all. When everything is said and done, you then need to clean up the mess.
All in all, it will definitely take longer to cook yourself and you could use that time to do other things.
As a sidenote: This seems like a fancy meal. Its been some times since I ate meat or lived in the US, but I remember rotisserie chickens being cheaper than whole chickens from the frozen section at the store. Is it not still that way?
Consumers spending more on food because they're eating out more because they can afford it isn't a sign of a bad economy in any way.
McChicken is $3.19 on my $1 $2 $3 menu, and my location is an expensive one.
Some stuff has gone 3x. More stuff has gone 1.5x or 2x. Nothing at McD's has gone up 6x in the past twenty years.
That's a 4.7x increase, which is close enough to 6x in colloquial conversation to convey the same point.
In that worldview, General Mills has a right to sell desserts for breakfast without government interference, parents have a right to feed that to their kids without government interference, and kids have a right to enjoy them without government interference.
That a generation later, a homemade breakfast feels like a weekend project that ought to be made special with all sorts of elaborate dressings is apparently just something to be accepted when these rights are honored.
I have no idea how you "outcompete" Captain Crunch with a bowl of rice porridge in that world, and can only imagine the outcry and lawsuits from General Mills if the government put much meaningful effort into trying.
Based on the percent of people who were able to do it before there were fast food restaurants everywhere, I think people will manage to figure it out.
The only reason they have not is due to lack of incentive (sufficiently cheap food at restaurants).
> 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.
Nobody is saying people can't cook. They're saying it'll take a little while for people who aren't used to cooking to change their habits and pick up some planning/organizing/cooking skills again that they might have lost. And they're saying that price (a lack of sufficiently cheap food at restaurants) will be the driving force behind that change.
For example, if restaurant or prepared food prices went up 5x today, basically everyone (with space and appliance to cook) has the capability to buy a pan, spatula, bowl, fork, eggs, salt, pepper, and start making scrambled eggs for dinner.
And then they would watch a YouTube video and try lentils, and rice, and etc. And in a few weeks they would have a bunch of dishes under their belt.
A good lot of the people from that time are dead and they become fewer every day. Meanwhile, their children, who grew up since then, have radically different baseline expectations about what a meal should taste like, how big it should be, how filling it should be, how convenient it should be, etc
It’s very different to recall the habits of a received culture than it is to adopt a new culture that is completely alien.
In some post-apocalypse, of course people will figure this stuff out, but expecting that to happen just because of incidental market relationships in an otherwise healthy economy is a fantasy.
It takes the passion of a wellness geek or absolute desperation to throw away all your preconceptions about how you’ve related to food your whole life. It doesn’t just happen because prices crept up a little here or sank a little there.
In reality, you don’t have to. You know that even if you have been getting a raise at work it is nowhere near what real inflation has been.
This is objective reality. The economy is shitty for most.
https://fred.stlouisfed.org/series/DSPIC96
The economy being fine to good is literally the only evidence available. Nobody is acting or voting like the economy is actually bad.
We're seeing revealed preferences in action.
Now we're being told low interest rates are the dominating objective of having a good economy, even though they're lower than when my parents bought their first and only house in 1994 and lower than they were during the dot-com bubble.
Another thing to keep in mind here is that it takes time for people to work out specific budget changes as well. Not everyone tracks their finances aggressively, and it's not surprising to me if restaurant prices go up that it would take maybe a year or two for people to start looking at their budgets and thinking, "hey, I could cut a lot here."
A 5X price increase overnight is something that would be impossible for people not to notice, but I suspect anything that's an impulse buy where the price goes up slowly to be somewhat lagging with people's reactions to those prices, and then similarly lagging with them taking the time to implement changes as a result. See also stuff like streaming services, where someone might keep a streaming service after a price increase even though they wouldn't have signed up at that price. Both inertia and just general lack-of-insight into those price increases can slow down consumer reaction.