Americans’ spending on food plunged during pandemic – Successful Farming

The pandemic and its accompanying economic slowdown prompted a dramatic 7.8% cutback in consumer spending on food in 2020, said two USDA economists. The reduction was more than double the impact of the Great Recession on food sales, partly because the pandemic temporarily shut down most of the food service sector.

“In 2020, as in previous recessions, U.S. consumers shifted food expenditures to more cost-efficient [grocery] outlets instead of … eating-out establishments,” wrote the economists in the USDA’s online Amber Waves magazine. “In 2020, during the COVID-19 pandemic, [inflation-adjusted] food expenditures fell 7.8% from 2019.”

The shift was profound: Expenditures on so-called food away from home, which is always more expensive than home cooking, plummeted by one-fifth. Food outlays by consumers, businesses, and government entities totaled $1.79 trillion in 2020, down $100 billion from the previous year.

For the first time since 2003, consumers spent more on groceries than they did on restaurant and carryout food, said economists Eliana Zeballos and Wilson Sinclair. Food at home spending was $877 billion, up by $69 billion, while food away from home spending fell to $813 billion, a decline of $165 billion, according to the USDA’s Food Expenditure Series, which draws heavily on Census Bureau data. During the Great Recession, food spending fell by 1.5% in 2008 and by 3% in 2009.

For the average American household, the pandemic brought a 10.4% decline in overall spending last year, according to the Labor Department, which says that 12% of consumer spending goes toward food. In its annual Consumer Expenditures report, it calculated that the average household spent $7,316 on food during the pandemic year, compared to $8,169 in 2019. Outlays on food away from home were down by one-third, while the average household spent an additional $300 on groceries. The Labor Department conducts surveys to gather data for the report.

“Consumers curtailed visits to restaurants and similar venues during the pandemic,” said the report.

Food prices, driven by the sharply higher cost of beef and pork, rose 3.4% last year, compared to the 20-year average of about 2.4%. The USDA forecasts that food price inflation will be 3.5% this year, then slow to a near-normal 2.5% in 2022. Food inflation ran at below-normal rates from 2015 to 2019.

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