Economy Negatively Impacted Food Expenditures

Articles
January 14, 2011

Economy Negatively Impacted Food Expenditures

Food retailers and foodservice operators have had a very tough task trying post some positive sales growth during the past couple years as consumers kept tight hold of their wallets, in the latest report from The Food Institute.

“Sometimes when data about the recent past comes to light, it puts the current situation in a bit of perspective and indicates the worst may be behind us,” according to Brian Todd, President of The Food Institute who comments on recent food expenditure data the Institute analyzed from the Bureau of Labor Statistics.

Food retailers and foodservice operators have had a very tough task trying post some positive sales growth during the past couple years as consumers kept tight hold of their wallets. Overall U.S. household expenditures for food during 2009, for example, declined 1.1% from the prior year, the first such decline since 2003 and the largest year over year drop since expenditure reports were initiated by the Bureau of Labor Statistics in 1985. But the food industry was certainly not alone, as all consumer expenditures fell for the first time ever from the prior year.

“For food retailers and restaurant operators, almost non-existent food price inflation of just one-half of one percent in 2009 also contributed to that drop,” said Todd, who pointed out that retailers did not benefit from the sharp price rises for food-at-home as they had in the prior two years when prices rose 4.2% and 6.4%, respectively. 

  • Average family spent $1.36 a week less on food in 2009 than 2008
  • Food away from home expenses Dropped $1.51
  • Food at Home rose only 17 cents

During 2009, the average consumer spent a total of $6,372 on food compared to $6,443 in 2008. That breaks down to $122.54 a week in 2009 -- $1.36 less than in 2008. .  About 59% of that or $3,753 was spent for food-at-home or about $72.17 a week which was actually up 17 cents from the weekly average in 2008 as consumers obviously ate home more that in prior years. Away from home expenditures dropped 3%, meanwhile, with the weekly total falling $1.51 per household to $50.37.

But 2009 was almost certainly the low point according to The Food Institute, which reports that that sales at the nation’s supermarkets were up 2.2% from 2009 through Dec. 1, 2010 the latest current data, after coming in flat in 2009. And for eating and drinking places, sales were running 2% higher than in 2009 compared to only a fraction of a percent increase in 2009.

But tempering that somewhat will be the lack of retail food inflation again in 2009, which the Food Institute notes will again be under 1% on an annualized basis although on an upward monthly trend by the end of 2010.

The Food Institute will as always be reporting much more detail on the Consumer Expenditure data in its weekly report and annual Demographics Of food Spending publication. For more on the Food Institute, see www.foodinstinstitute.com.