Food spending fell in the United States after 10 years of increases

Food spending fell in 2020 in the United States for the first time, after 10 years of continuous year-on-year growth.

More than anything affected by the Covid-19 pandemic, the decrease in this indicator was 7.8 percent.

Annual real, or inflation-adjusted, food spending in the United States has increased every year since 1997 except for 2008, 2009, and 2020.

Spending on food at home (FAH) and food outside the home (FAFH) increased from 1997 to 2019, with a real FAH rising at a slower rate (39.7%) than for a FAFH (60.5 percent), according to the USDA.

In 2020, spending on FAFH decreased by 19.5%, while spending on FAH increased by 4.8 percent.

The pronounced substitution of FAFH spending by FAH was the main driver of the decline in real total food spending in 2020.

In general, consumption in FAFH establishments is a more expensive option.

For comparison, the USDA exemplified, total real food spending during the Great Recession decreased 1.5% in 2008 and 3.0% in 2009.

Food spending

FAFH spending fell 4.9% between 2007 and 2009 and, unlike the 2020 recession, FAH spending also decreased (4.0 percent).

In 2020, as in previous recessions, American consumers shifted expenditures to more profitable FAH outlets rather than to food outlets outside of FAFH.

However, public health concerns associated with the pandemic led many FAFH facilities to operate with limited capacity or cease operations, exacerbating the change in the way consumers spent their money on food.

Actual expenditures at FAFH stores in 2019 represented 51.8% of total food expenditures, while the remaining 48.2% occurred at FAH points of sale.

FAFH outlets incur costs for the workers needed to prepare and serve food, as well as other general expenses, such as buildings, equipment, and utilities.