Commentary: Americans spent more on eating out than on eating in: Is that good?

Commentary: Americans spent more on eating out than on eating in: Is that good?
June 18
00:00 2015

By Dr. Mike Walden

A milestone was set in January of this year. No, it wasn’t in sports, entertainment or politics – although there may have been some records established in those areas I missed.

Instead, it was a milestone in our collective personal spending. For the first time, Americans spent more on eating out than on eating in. Specifically, we spent $50,475 billion eating in restaurants and other food outlets that month, compared to the $50,466 billion we paid for food in grocery stores and supermarkets.

You might think that’s not much of a record because the two spending amounts are so close. But just five years ago we spent $7 billion more per month at food stores than at restaurants. And in the early 1990s, households spent more than twice as much on food bought at grocery stores and supermarkets than they did on restaurant food.

Interestingly, households of all income levels spend about the same percentage of their income eating out – around 5 percent – although this translates into more dollars spent by those with higher incomes.

However, younger households spend more eating out than older households, and the young also devote a higher percentage of their income eating out.

The obvious question is, “Why?” Why are we spending more money buying meals away from our homes than we are preparing and eating meals at home? The answer is based on three big socio-economic changes occurring in the last 100 years.

Development of the factory economy

A century ago the economy was centered on farming. Families worked all day on the farm. There were few restaurants to go to, and those that did exist were likely hours away. Food that was eaten was raised on the farm. Tasks were also very gender-specific, with men tending to livestock and crops and women handling the cooking, cleaning and child-rearing.

The first shift to eating out occurred with the development of the factory economy. As mechanization came to the farm – thereby reducing the need for farm laborers – millions moved off the farm and into the city to take jobs in the emerging manufacturing sector. Most factory workers couldn’t go home for lunch, so many carried their cold meat, cheese, bread, fruit and perhaps soap in pails (“lunch pails”) to the factory floor.
But over time, smart-thinking merchants saw an opportunity to offer low-cost, quick meals to the workers. This was the forerunner of “fast food,” and lunch became the first meal for many workers to eat out.

The labor force participation of women

As the manufacturing economy morphed into the service economy, how and where we ate our meals changed again. This time, the change was led by women moving into the paid workforce.

The development and mass use of household appliances (washing machines, dryers, refrigerators, vacuums) reduced the time and effort needed to maintain homes. At the same time, businesses found many of the new service jobs could be performed as well by women as by men. These two factors led many women to take paying jobs in the labor force. Indeed, the labor force participation of women rose from 34 percent in 1950 to more than 60 percent today.

One result of this change was a time crunch at home. In two-adult households where both partners work and in the increasingly prevalent one-parent households, time is often the most limiting factor. Taking time to purchase food ingredients and prepare meals became a chore many households decided they couldn’t do. Going out to eat or purchasing prepared meals at restaurants for eating at home became a typical pattern for many families.

The rise of the millennial generation

This brings us to today and the third big trend affecting where we eat: the rise of the millennial generation. The “Millennials” – those born between 1981 and 1997 – will surpass the Baby Boomers (born from 1946 to 1964) this year as the most populous generation. Millennials have been following their own path – staying in school longer, marrying later and delaying having children. Eating out is a big part of their social life. As the Millennials have gained in numbers this decade, spending on eating out has experienced its sharpest jump ever.

Is it good that as a society we are eating out more? Some yearn for the “old days” of the family gathered around the dinner room table eating a home-cooked meal. They say something has been lost as this scene becomes rarer. While others may recognize the loss from this tradition, they argue times change, and forces, like those cited above, have altered the way we eat.

I won’t try to answer whether eating out more is good or bad. I will say that, with today’s fast-changing technology, any trend can be easily reversed in the future. Who knows — maybe urban gardens and new cooking methods will lure families back to the kitchen and dining room table. Someday we may be lamenting the “good old days” of restaurant food and carry-out. You decide!

Dr. Mike Walden is a William Neal Reynolds Distinguished Professor and North Carolina Cooperative Extension economist in the Department of Agricultural and Resource Economics of North Carolina State University’s College of Agriculture and Life Sciences. He teaches and writes on personal finance, economic outlook and public policy. The College of Agriculture and Life Sciences communications unit provides his You Decide column.

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