1/19/2012 6:45 PM ET|
Is eating out cheaper than cooking?
As grocery prices go up and restaurants struggle to hold the line on menu prices, dinner from the kitchen isn't necessarily the most economical.
All across the country tonight, Americans will be asking one important question: "What's for dinner?"
For an increasing number, the answer will be on a restaurant menu rather than in their kitchen, according to a report released late last year by Bank of America Merrill Lynch. Since mid-2009, consumers have been spending more and more of their paychecks -- now almost 4.5% -- on dining out. While spending on grocery items takes a bigger slice of those paychecks, it has remained basically flat over the same period.
The choice of whether to eat in or dine out may seem obvious, but for people still trying to recover from the Great Recession, it's often not that simple. A closer look at the financial and time pressures families are experiencing helps explain why.
Shopping and preparing meals takes time -- something people simply don't have these days. And if Americans do find a spare hour here or there, they're likely to dedicate it to work so they can earn a little extra income, writes Neil Dutta, an economist at Bank of America and co-author of the report.
On top of that, supermarket food prices are increasing at a staggering 6% a year, about 2.5 times as fast as the cost of restaurant meals, according to the report. It is becoming cheaper for consumers to dine out. "It's all about substitution, as prices at grocery stores rise, consumers will respond by making choices," says Dutta.
One of the biggest drivers behind the increased food costs is the rising price of commodities like wheat and corn. Grocery stores tend to pass on these price hikes directly to consumers. Restaurants too, have to deal with increasing commodity prices, but they are better able to offset them by buying in bulk and cutting back in other areas -- like wages. With youth unemployment hovering aroiund 24%, it's an unfortunate truth that restaurants are able to find younger workers who will do more for less.
To get a read on the relative value of dining out versus eating in, The Fiscal Times took a (virtual) trip to some large restaurant chains and compared the prices of meals there to the costs of preparing the same meals at home. Admittedly, our methodology was highly unscientific. After all, we're based in New York City. Further, we didn't go hunting for the best grocery deals and didn't factor in whether one meal or another would be healthier or friendlier to the environment. But that's part of the point -- eating right and finding the extra savings that could be had by comparison shopping come with money and time commitments many families can't afford.
The comparisons that follow at least offer some food for thought.
Meal: 10oz rib-eye dinner (includes soup, salad and asparagus)
Total price: $17.99
Grocery store: rib-eye, $9.55; soup, $2.99; bag salad, $3.99; asparagus, $3.99 a bunch
Grocery store items were calculated using prices at FreshDirect. Rib-eye prices were calculated using a 10-ounce cut of meat.
Meal: seafood alfredo (unlimited salad and breadsticks).
Total price: $15.50
Grocery store: fresh shrimp, $5.33; scallops, $3.99; pasta, $1.99; bag salad, $3.99; breadsticks, $3.99
Winner: Olive Garden
Grocery-store items were calculated using prices at FreshDirect. Seafood estimates based on one-third pound of shrimp and one-third pound of scallops
Meal: 10 piece garlic-grilled jumbo shrimp (served with broccoli, mashed potatoes, salad, rice pilaf)
Total price: $18.99
Grocery store: jumbo shrimp (10 pcs), $7.99; boxed wild rice, $2.79; mashed potatoes, $2.99; broccoli, $2.99 each
Total price: $17.76
Winner: Eat at home (barely)
Grocery-store items were calculated using prices at FreshDirect. Seafood estimates based on one-half pound of shrimp. Mashed potatoes sold as finished dish at FreshDirect.
Meal: beef and broccoli (includes white rice)
Total price: $12.75
Grocery store: flank steak, $9.79; broccoli, $2.99 each; rice, $2.79
Winner: P.F. Chang's
Grocery store items were calculated using prices at Fresh Direct. Beef price based on a 7-ounce portion of flank steak.
The Cheesecake Factory
Meal: Lemon-roasted herb chicken (half) served with mashed potatoes and carrots)
Total price: $16.95
Grocery store: fresh organic chicken half, $9.18; potatoes, $2.99; carrots, $2.99
Total price: $15.16
Winner: Cooking at home
Grocery-store items were calculated using prices at FreshDirect. Chicken price calculated using half of a full chicken price.
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You can ALWAYS eat cheaper at home.
Ok folks this is a racket, a lot of you hit it on the head, the resturant is for one the rest was for four so the resturant would have been 80 dollars and this is with no COCKTAILS! oh we all need a drink when waiting for our meal, especially if those Dam kids are screaming.
I just made barbeque chicken with my own twice baked Potatoes with a bunch of Asparagas(6 Beers not in price) and there was enough for five people and it was under 10 Dollars, please! the Marketing scam here is way over budget.
I hope you all enjoyed this!
Blatantly wrong, $2.99 for a serving of rice at home, what planet are you having it imported from. I can buy enough rice to feed a family for a month for $2.99. Potatoes $2.99, I can buy a ten pound bag at Walmart for $2.59, even with a little butter, a little milk, salt and pepper, the total cost of a serving, about a buck. You are either eating ten pounds of potatoes in one serving, or you are completely insane. I can make any serving listed above for less than half what it costs in a restaurant. I have no idea where you are getting your prices.
The math is NOT wrong here. It often does cost much less to eat out than eat in. The key point here is comparable food items. You can't go to a fancy steak house and order a filet mignon and compare that to a cheap flank steak from the grocery store. It's not apples to apples. You also can't go out and spend money on cocktails and expensive appetizers and deserts and expect it to be cheaper. It's a well known fact that restaurants make their money with appetizers and deserts. These items are way overpriced, and most likely if you're home you're not going to make those items anyway. If you are smart about what you are ordering at restaurants, you can and will save money over eating at home.
Two other points to keep in mind. First, you can order takeout at these places. That eliminates the time waiting for a table and the cost of a tip. Second, you have to consider waste. When you buy bulk at home, very often that food goes to waste. For example, as a single person, I don't buy bread or milk for home because these always go bad before I can eat/drink them. It's cheaper for me to go to a deli and order a sandwich when I'm hungry than to buy a loaf of bread that I'm only going to use half of.
What farce... Lets look at it backwards...
The cheapest meal on there is 12.75. considering it serves one person meal it costs $25.50 for a person each day (lunch and dinner only) which means it costs $765 for a person a month or $1510 for a family of two, add in a modest $200 a month for breakfast and the food bill is $1710 a month for the family. I only spend a fourth of that for a family of 3 buying grocery each month. Might i say we do eat good food with that money (dairy and poultry always organic)
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