The Unexpected Reason People May Be Eating Out More
There are many reasons to dine out — birthdays, fancy dinners, drinks with friends, too tired to cook, or even because Krispy Kreme just brought back two fan-favorites. Sticking to your budget is not usually among those reasons. In fact, eating out or getting takeout is one of your budget's most famous and well-established rivals. According to Business Insider, restaurants traditionally jack up food prices 300% for the same meal over what you'd spend to make it at home. Money Wisdom gives the great example that if you spend $3,000 on dining out or takeout in a year, you could make that same exact food at home for only $1,000 (per Money Wisdom). However, that data was collected back in 2017, before the current inflation cycle.
So how did eating out become the latest money saving trend? Has your food budget's biggest enemy become its ally? And most importantly, can you actually save money by heading out for your next meal?
Budget friend or foe?
In this era of extreme food inflation, eating out to save money might not be as crazy as it sounds. Restaurants are certainly feeling the squeeze of food inflation just like consumers. McDonald's blamed the rising costs of their main ingredients for price hikes in January and during a July investor's call, where they projected 12% to 14% inflation on the cost of food and packaging they use in the U.S. (via New York Post and CNBC). However, it turns out that the inflation many restaurants face isn't quite as bad as what grocery stores face, or at least, it hasn't been passed on to consumers yet.
According to The Wall Street Journal, consumer prices at the grocery store have increased 13.1% while prices on restaurant menus only rose 7.6%. While in a normal year, a nearly 8% spike in pricing might seem like a lot, this year it makes for "the biggest inflationary gap between grocery stores and restaurants since the 1970s" (via WSJ). That means restaurant prices are, in relative terms, at an all-time low. With this unprecedented event, dining out may be cheaper than buying the food at the grocery store and preparing it at home in some instances. Of course, it matters what you're buying and where you buy it. While crazy high food inflation may be why dollar menus are disappearing across the country, what value menus still hold may now be a very good deal.