People are spending more at restaurants than at grocery stores
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There's a chance your household food budget has been turned upside down over the last year.
Driving the news: Americans spent 20.7% more at restaurants than they spent on groceries in 2022 — and that figure rose to 29.5% in the first two months of the year, according to Commerce Department data compiled by JLL.
Put another way, consumers spent about $130 on dining out for every $100 they spent on groceries to start the year, Axios' Nathan Bomey writes.
Why it matters: The trend has led to Cleveland restaurants generating more revenue since the start of 2022, Laurie Torres, president of Cleveland Independents restaurant association, tells Axios.
What they're saying: "Grocery stores raised prices due to inflation at a higher rate than restaurants did," Torres says.
- "For many people, it was less expensive and more convenient to eat out or order a meal for delivery than to buy the ingredients and make it."
By the numbers: Looking at the last 10 years, grocery spending topped restaurants in every month from 2013 into early 2015.
- The numbers turned in favor of restaurants when the U.S. inflation rates began to steadily increase in 2015, peaking last year when inflation hit a 40-year high of 8.6%.
Between the lines: Due to inflation, the price of groceries increased by 11.4% in 2022, the highest yearly percentage change since 1974, according to the Department of Agriculture.
Yes, but: While restaurants' revenue went up, the profit on that revenue declined, Torres says.
- "Restaurants weren't immune to inflation," she says. "Not only did the cost of goods go up, but employing people is more expensive."
What's next: Restaurant prices increased 8.8% in March, while food-at-home prices increased 8.4%.
- It was the first month since 2021 that restaurant pricing outpaced grocery stores.
The bottom line: If that trend continues, the amount of money spent at restaurants and grocery stores in 2023 will be much closer than it was in 2022.