Apr 20, 2023 - Food and Drink

Iowans' restaurant tabs are heftier than groceries

Illustration of a hundred dollar bill with Benjamin Franklin wearing a chef's hat.

Illustration: Aïda Amer/Axios

Americans are spending more money at restaurants than on groceries — and the gap is widening.

Why it matters: It's a trend that holds true in Iowa and underscores the significance of the restaurant industry, Jessica Dunker, CEO of the Iowa Restaurant Association, tells Axios.

By the numbers: People spent 20.7% more at restaurants than on groceries in 2022 — and that rose to 29.5% in the first two months of the year, according to Commerce Department data released last week and compiled by real estate company JLL.

  • Put another way, consumers spent about $130 on dining out for every $100 on groceries.

Zoom in: National restaurant spending rose 13% in March, compared with a year earlier.

  • That outpaced retail's overall 2.9% gain, the Commerce Department reported Friday.
Monthly U.S. <span style="color:#ff7900;"> grocery</span>  and <span style="color:#15a0ff;">dining out</span> spending
Data: U.S. Census Bureau; Chart: Tory Lysik/Axios Visuals

State of play: Iowans' spending on food and beverages prepared away from home nudged just ahead of groceries before the pandemic. But that sank when COVID-19 closures cut restaurant percentages by about half, Dunker says.

  • Restaurant percentages have since regained their edge.

Yes, but: Many of Iowa's 6,000 dining establishments have not yet fully recovered from the pandemic, Dunker notes.

  • Increased costs of goods and labor make it harder to obtain a sustainable, profitable business model, she says.
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