1994 spending for food away from home outpaces food at home - includes related article

Food spending in the United States rose to $647 billion in 1994, a 5.3-percent increase over 1993 (table 1). Expenditures for eating out (food away from home) led the way, rising 6.1 percent to $303.2 billion. Retail food expenditures (food at home) rose 4.6 percent to $343.7 billion. Adjusted for inflation, however, total food spending rose 2.6 percent in 1994 - up 1.0 percent for food at home and up 4.3 percent for food away from home.

Personal food spending increased less than that for most other major categories of personal consumption since the 1990-91 recession, as is typical. Personal food spending differs from total food spending because it excludes expenditures by governments and businesses. Personal expenditures for all food rose 5.7 percent in 1994, while spending on transportation, cars, and gasoline went up 6.7 percent, and medical care and drugs increased 6.6 percent (table 2). Of the 5.7-percent increase for all personal food expenditures in 1994, there was a 7.4-percent growth in away-from-home food expenses compared with only a 4.7-percent increase in expenditures for food at home.

In 1994, only 11.4 percent of disposable personal income of households was spent on food - 6.8 percent went to food at home and 4.5 percent to food away from home. That compares with 12.4 percent of disposable personal income going to food in 1984. About 25 percent of disposable personal income in 1994 was spent on housing (including supplies, fuel, and furniture), 16 percent on medical care and drugs, 11 percent on transportation (including cars and gasoline), and only 4 percent was allocated to savings.

Once adjusted for inflation and population growth, total food spending per person fell 0.9 percent in 1994 [ILLUSTRATION FOR FIGURE 1 OMITTED]. But the trend toward eating out more continues, with a 3.2-percent increase partially offsetting a 4.3-percent decrease in food at home to soften the decline in per capita real food spending.

Spending on Food Prepared Outside the Home Considerably Higher

One of the ways by which people economized during the 1990-91 recession was cutting down on eating out or going to less expensive places. The share of total food dollars spent away from home declined from 1988 to 1991, reflecting the economic slowdown and the subsequent recession. By 1994, however, spending for food away from home increased more than for food at home and the share reached new highs, 47.0 percent of food dollars and 36.7 percent of food quantities, continuing the spending recovery begun in 1992.

Vigorous competition among fast-food chains drove down prices in 1990 and 1991, and, as a result, fast-food sales declined from 34.0 percent of dollar sales of food away from home in 1989 to 33.6 percent in 1991. However, the share started upward in 1992 and rebounded to 35.5 percent in 1994, as people continued to eat out more, but kept a wary eye on prices.

Table 1
Food Spending Rose 5.3 Percent in 1994

These newcomers in the marketplace are putting competitive pressure on operators of all kinds of supermarkets. Many supermarkets are fighting back by featuring bulk sales and large club packs at competitive prices.

RELATED ARTICLE: Updated Data Available Soon

The first estimates for 1995 food expenditures will be available from USDA's Economic Research Service through the AutoFAX system in May 1996. These estimates will also include 1993 and 1994 revisions.

To receive by AutoFAX, dial by telephone connected to a FAX machine (202) 219-1107, respond to the voice prompts, and order document # 11530 (lists all the available data tables, which can then be requested).

When responding to the voice prompts, please note: when asked for a yes or no response, press 1 for yes and 2 for no; you may interrupt the main menu choices to order the document by pressing 4 - the system will then prompt you for the document number.

The authors are agricultural economists with the Economic Research Service, USDA. Manchester is with Commercial Agricultural Division, and Clauson is with the Food and Consumer Economics Division.

COPYRIGHT 1996 U.S. Department of Agriculture
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