Today, more Americans are eating at restaurants, fast-food joints and cafes than ever before. In fact, according to the latest data, consumers are even eating more at restaurants than they are at home (SEE: It’s Official: You’re now spending more at restaurants than at grocery stores).
Despite the fact that eating at home is far cheaper, consumers continue to dole out premium prices for mediocre and oftentimes unhealthy food.
According to data from the American Enterprise Institute (AEI), food prices at home are 4.7% lower than food away from home. And this is bad news for the restaurant industry, which is contending with soaring labor costs thanks to the higher minimum wage (SEE: 4 states vote to punish low-skilled workers with minimum wage hikes). Overall, food prices at restaurant are rising two percent year-over-year.
Here is the chart from AEI:
This could be the first sign of a so-called restaurant recession.
Food will almost always be cheaper at home, but sometimes you need a break from cooking, or you are out shopping with my son and want a quick snack. Yesterday I stopped by the Taco Bueno and purchased 2 tacos and a bean burrito – and they had a special, a free beef and bean burrito with any purchase. All for less than $5. I do not think I could of made all that for less than $5 at home. I do not do many full blown meals out because by the time you add the tip, it is just not worth it. Special occasions now are the only time I go to a set down restaurant with a waitress.