Chart of the Day I
Based on yesterday’s Census Bureau report on April retail sales, consumer spending at “Food Services and Drinking Places” (restaurants and bars, see red line) was greater than grocery store sales (blue line) in April for the third straight month, reversing a longstanding pattern of food spending and establishing a new US consumer milestone, the "great convergence." As the chart above shows, the spending habits of Americans over the last three months represent the first time in US history that spending on food at restaurants by Americans has exceeded spending on food at traditional grocery stores and supermarkets. In April, US consumers spent $51.25 billion on food and beverages at restaurants, which was almost $1.5 billion (and about 3%) more than $49.77 billion in grocery store sales for the month. Over the last three months, spending at “Food Services and Drinking Places” was $152.6 billion compared to $149.8 billion spent on food at grocery stores from February to April.
Chart of the Day II
The chart below provides another graphic illustration of the great convergence in the food spending habits of Americans over a much longer period of time, this one using annual USDA data from 1869 to 2013 (Table 1 here). As a share of total food expenditures, spending on food at home has gradually decreased from almost 95% in 1869 to 50.4% in 2013.
Note: There has been some criticism of the two charts above that were posted on Twitter today (and previous versions that were posted here on CD and on Twitter) because of the claim that retail grocery sales don’t include sales from Walmart and Target. While that is a valid criticism of the Census Bureau grocery store sales data, it’s not true of the USDA grocery sales data -- see explanation here:
Adjusted sales from Target and Wal-Mart Stores, Inc. are added to grocery sales from the Census Bureau because these stores are not classified as supermarkets by the North American Industry Classification System (NAICS). Therefore, grocery sales reported by the Census Bureau are smaller than total sales [from the USDA].
It’s also true that the “food away from home” sales data reported by the USDA is a broader category and is therefore greater than retail sales reported by Census for spending at “food services and drinking places.” According to the USDA:
Food-away-from-home spending is mainly for food purchased at eating and drinking places, but it is also for food purchased at such outlets as hotels and motels, recreational places, vending machines, and schools and colleges.
For recent years, the differences were as follows:
- The USDA reported annual spending of $694.5 billion in 2013 on “food at home” and spending of $653 billion on “food away from home.” With some other adjustments for home food production and food donations, spending on food at home in 2013 was 50.4% of total food expenditures (see bottom chart above.)
- The Census Bureau reported annual spending of $576 billion in 2013 on food purchased at grocery stores and spending of $542 billion on food at restaurants, which would mean that 51.5% of food expenditures (for those two categories) in 2013 were spent at grocery stores. In 2014, 50.7% of total food spending was for food at grocery stores ($591.9 billion) and 49.3% was for spending at restaurants and bars (food sales data from the USDA are not yet available for 2014).
The Census Bureau’s retail sales figures don’t count grocery store sales at Walmart and Target, but they also don’t count food purchased away from home at hotels, recreational places, vending machines and schools and colleges. With broader coverage for food spending, the USDA does count both grocery store sales at Walmart and also spending on food away from home that isn’t included by the Census category “food services and drinking places.”
Here’s what’s important: By either organization’s slightly different calculation of food spending, it’s clear that the US has experienced a great convergence over the last 150 years in food spending, as Americans now spend less than ever before on food at home/food at grocery stores (50.4% of total food spending according to the USDA in 2013, 50.7% according to Census in 2014), and more on food away from home/food at restaurants than ever before (49.6% of food spending in 2013 says USDA, 49.3% in 2014 says Census).