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The Food Institute Blog

The Food Institute Blog

Why Do the Poorest Americans Spend So Much at Restaurants?
Posted on June 13, 2016 by Chris Campbell

Figuring out how to feed a family is no easy task. Often, it's a juggling act, with the needs of nutrition, variety, personal taste and cost all competing for what ends up on the plate. For millions of Americans, the daily costs of eating make up a significant portion of their overall budget. Conventional wisdom would hold that low-income Americans would be more likely to cook their own food at home in order to get some savings, but new research indicates this may not be the case.

According to J.P. Morgan Chase Institute, the 20% of Americans in the lowest-income bracket allocate 16.6% of their total spending to restaurants. This is more than or equal to the amount allocated by the second, middle and fourth quintile, being bested only by the 17.8% spent by those in the top income bracket. Certainly, this flies in the face of conventional wisdom.

These numbers don't seem to be small sample size noise, either. The study examined 15 billion anonymous credit and debit transactions across 15 large metropolitan areas to see how spending could vary depending on income level. The reported statistics beg an important question: where, exactly, are these low-income Americans spending their food dollars?

Although it's not clear whether Americans are spending more on food away-from-home than at-home, it can be said that they are spending more out of the home than they were years ago. However, these numbers should not be used to show low-income Americans are blowing their paychecks away at lavish, fine-dining establishments. Rather, they are spending their money on fast-food and other locations that can provide low-cost foods.

A 2014 report by National Geographic can help spread some light on the topic. Fast food is a quick fix for parents who are single, work multiple jobs or are just tired after a long day of work. The quick solution may not always be the healthiest, but the convenience is worth it for many Americans who are fighting day in and day out to make sure food is on the table.

Posted in Retail   Foodservice  

 

About the Author

Chris Campbell
Business Writer
The Food Institute

Chris focuses on fresh, canned and frozen fruit and fresh and dried vegetables for the Food Institute Report. In addition, he assists in compiling data for various Food Institute publications throughout the year. He is a proud Rutgers University alumnus with a degree in English, and has a background in web writing for a variety of industries, including legal, foodservice and small-to-medium sized businesses. In his downtime you can find him watching New York Yankees baseball, hiking, enjoying live music and spending time with his dog Kaiden. He invites you to contact him via email at chris.campbell@foodinstitute.com to talk about anything food-related.

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