Here is per capita spending on food over the past 90 years:
The spike during World War II is interesting, as well as the short drop in eating out as soon as the war was over. The pandemic produced an increase in food at home but a bigger decline in food out. Since then, however, restaurant spending has returned to the sharp growth it's enjoyed ever since 2010.
IIRC, restaurant price inflation has exceeded grocery price inflation.
The $18 McDonald's hamburger story comes to mind...
$18?!?! Where do you live? It's $32.50 where I'm at!
Just off the top of my head, agricultural production has -- at a macro level, neglecting the sometimes tragic effects on small farms -- enjoyed the benefits of huge economies of scale, including materially lower labor usage per unit of revenue, while restaurants have enjoyed neither. The outlier here is food-at-home costs.
Very true. I can think of 3 not-mutually exclusive reasons:
1. The grocery industry has much less competition than it used to. In my neck of the woods, Winn-Dixie disappeared not so long ago. When Kroger acquired Harris Teeter, it was the local Kroger they closed. Within the last couple of years, Food Lion acquired Bi-Lo and closed them all. Bi-Low and Food Lion were the two biggest chains here. Walmart is a miserable place to grocery shop, though there are two in reasonable driving distance. If you add up the Harris Teeters, Piggly Wigglies, Aldis, and IGAs in reasonable driving distance it comes to 5 mostly not so nice stores against 3 fairly nice Food Lions.
2. We've got way more variety in a grocery store now than we did when I got a high school job bagging groceries at a Winn-Dixie. The stores are larger and the selection is incredible compared to what it used to be. Some of us, including me, are spending more at the grocery now because they stock things we find we want and couldn't buy in the past.
3. Households are smaller than they used to be. I'm not advocating for larger households, but it was easier to use up stuff before it went bad when there were more mouths to feed. Also, buying smaller quantities of many items is more expensive per pound or quart than buying larger ones.
But this is per capita, not the same market basket of food. Maybe in 1935 it was mostly turnips, mutton, potatoes and oatmeal and in 2020 mostly bags of washed baby spinach, Wagyu beef, deli department and frozen entrees, and imported organic muesli.
While I'm here, grocery store prices in the EU (well, Germany and Austria) are overall substantially lower than in the US for some reason.
It just also occurred to me that I've seen a graph of % of income spent on food in the US and that line went in the opposite direction, generally down over time. I suspect that there's something to my theory stated above.
Grocery prices are all over the map, based upon captured market, distribution networks, etc.
I can spend 50¢ to $5 on the same local or imported avocado depending on where I buy it in my county, other counties might not have that choice.
The same is true for western europe (France, Spain, England). Anecdotal, but groceries and restaurant meals in the US seem significantly more expensive than in the wealthy countries of Europe.
Speculating that the bump during WW2 was because all those Rosie the Riveters weren't home to cook, so incapable husbands ate more restaurant meals or availed themselves of whatever type of takeout there was.
Or themselves were out at jobs or war. It's not like they could go to a home cooked meal when they had a night off if they were in the military.
Yes, Kevin, but spending on food as a percent of personal income has decreased steadily over the same period to less than half of what it was in 1950. See http://www.aei.org/wp-content/uploads/2014/09/foodnew-600x444.jpg?x85095
And yet virtually everyone bases their opinions about inflation on food prices, at least according to a recent NYT article, because of the availability heuristic. I suppose it's nice for producers that raw expenditures on food keep rising, but from the consumer perspective, food availability has vastly improved. Not surprisingly, since 2008 household hunger has steadily declined. https://econofact.org/wp-content/uploads/2021/05/Schanzenbach-hunger-chart-web-v4.png
Where does "restaurant food, delivered and consumed at home" fit in? Is it "restaurant" or "eaten at home"? Potentially this is a big deal, now that grub hub et al have supplanted home-delivered pizza. You can get everything, and it costs even more.
Ppl are upset their Big Macs cost too much.