October 6, 2006
Eating Cheap Means Eating Out for Many
Many Americans have come to the conclusion that it is cheaper or at least no more expensive to eat out than stay at home and prepare a meal themselves.
Mark Chernesky, a multimedia coordinator in Atlanta, for example, told The Christian Science Monitor a recent meal he and his wife prepared at home cost about $30 to make and an hour of their time.
On another evening he went to a restaurant for hand stuffed ravioli with puttanesca sauce and has explained, “I’ll get out of here for $17 plus tip.”
Paul Howard, a manager-instructor at Café Laura, a restaurant run by college students at Penn State, is on the same page. “When I add my hourly rate, the time to cook at home, I can instead take my family out to dinner and it comes out pretty even,” he said.
While not all see eating out as a less expensive alternative to making it themselves, there is no doubt that Messrs. Chernesky and Howard are part of a large group of American consumers.
According to surveys conducted for the National Restaurant Association (NRA), many Americans view restaurants as an extension of their own home. Over the next 10 years, it has been projected that more than half of the average amount spent by households on food will go to restaurants.
“Restaurants aren’t winning on their sophistication of pricing, they’re winning on their ability to deliver value,” said Mark Bergen, a pricing specialist at the Carlson School of Management at the University of Minnesota. “Simply put, restaurants are more efficient than you are.”
Discussion Questions: Are consumers coming to the conclusion that it is in fact less expensive and more convenient to eat out than to prepare meals from
food bought at grocery stores? What are grocery stores doing to deal with this competitive threat?
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From what I’ve seen on my admittedly infrequent visits to the US over the past few years, there are lots of choices available to people willing to buy food for meals rather than eating out or getting take out. One of the big problems is that it involves thinking. If you go to a restaurant, you select from a menu and get instant gratification. If you go to a grocery store, you have more choices and then, even if you buy a ready meal, have to head home and take some action rather than being served. You also have to wash up and get rid of the garbage. When feeding a family you have to make decisions and choices for several people rather than letting them choose for themselves. Stores are certainly offering alternatives which I believe are always at least a little bit cheaper but people make choices and decide that they deserve to be treated well and spoiled by not having to do anything for themselves. If and when that’s the case, there really isn’t much you can do about it. It’s a much harder job to persuade them to fend for themselves even if it is buying convenience food, never mind cooking from scratch which is one area on which I am almost prepared to throw in the towel.
BUT BUT BUT there is some light at the end of the tunnel, I think, at least in the UK. More people are asking more questions about their food. More people are thinking about not only what they eat themselves but what they feed their families. When that’s the case, there is slightly greater opportunity for partnership between retailers and consumers. Perhaps that concept – partnership – could be developed further.
If people wish to spend their money on restaurant meals multiple times a week AND if they can truly afford it…more power to them. Sometimes I think families go out to dinner because they feel that’s the only way they can get everyone to sit down together, the parents and kids, without interruptions, and be able to share the day’s events. But a great many families cannot afford it yet do it anyway, then wonder why there is more month than money. Unlike so many other expenses of life — mortgage or rent, medical care and prescriptions, home heating, gasoline for the car, veterinary costs — food really is an area where there is some possibility of control.
Cooking at home is vastly less expensive than restaurant or takeout even when using the very finest and freshest ingredients along with utilizing some convenience items such as bagged salads. Cooking at home provides opportunities to far better monitor the content of the family’s food (such as fat, salt and carbs). Cooking at home with regularity gives hope that yet another generation of young men and women may learn the joys of preparing great new recipes as well as continuing old family favorites.
Grocery and specialty food stores, in my opinion, do not do enough marketing that extols the pleasures and advantages of preparing and eating meals at home.
Which is the cheaper, dishing in or dishing out? That is the question. But there’s a great deal of confusion feeding within that question since so many present-day social, recreational, work, cultural, educational and economic factors intertwine in lives today.
Each decade has seen a decrease in the number of people who are willing to trade off time in the kitchen at the expense of “necessary” or preferred activities — at any cost. This evolution in the mindsets on the marketplace has confused many grocers who are pondering what should be the definition of a grocery store today.
The restaurant industry has experienced real growth for many years, versus the grocery business, which hasn’t. Restaurant worker wages are among the lowest possible, so anyone making more than the minimum wage could say that his/her time is more valuable. Buying your own groceries has several advantages to the customer, besides the wage argument. For example: (1) individual preferences are accommodated (for quality, price, timing, quantity, etc.) and (2)it’s hard to complain about the service if you serve yourself. Whole Foods makes grocery shopping stylish and is positioned to leverage individual preferences. Very few other grocers have cracked that code. They continue to use commodity pricing and me-too services. Even though the restaurant business is full of copycats, there seems to be wider range of copycat types. Innovation expands markets.
I agree with Race – what did they make for $30? I’d imagine it wasn’t the handstuffed pasta with sauce – that’s a $10 meal that could stretch to feed 4 or make great leftovers.
It’s no surprise that this behavioral shift to dining out and convenience food has led to the increase in overweight and obesity in the US. Portion sizes have drastically increased, the ingredients in those food we’re also finding out aren’t good for you (trans-fat, hfcs among others).
The research that I’ve been reading indicates our poor diet and lack of exercise comes from ignorance. I believe this creates an opportunity for a grocer to educate and promote a balanced lifestyle, with food and the other items they sell as a centerpiece of course. Similar to the Whole Foods approach but really done on a mass market level — why not show people what 5 servings of fruit looks like (or better yet, run a demonstration in the store where they guess and if they get it right, enter to win a relevant prize)? I agree with the panel that retailers need to make a quantum leap forward.
If customers know how to shop (and cook), home cooking is far cheaper than eating out. However, food manufacturers have done such a great job over the last couple of decades with packaging prepared or easy-to-prepare items that the shopping carts tend to fill with the higher priced convenience goods and many consumers have never really learned to cook without the convenience items.
Can anyone remember the last time you bought a whole fryer, cut it up, battered and fried it in oil? Not to mention all the sides like mashed potatoes, homemade gravy, veggies and desert. (Now I’m getting hungry.) But my point is, many of us can remember our mothers preparing such meals on a routine and daily basis, often working outside the home and keeping up with the kids and their activities as well. It was cheap and good, but definitely more work than grabbing the pre-cooked foods at the deli counter or dropping by KFC.
As a society, cooking habits and the available ingredients and options have changed. Time is money. Saving time costs.
Even though restaurant meals of almost all types clearly cost more than eating at home and definitely cost more when you compare like meals to one another, the only thing that really matters is how consumers PERCEIVE the benefits of one versus another. And, there are plenty of casual restaurants these days that SEEM to be a good value, provide a quick and reasonably pleasant dining experience, and give you enough food to take home and eat again another day. Plus, we consumers are lazier than we’ve ever been (while at the same time we are time-pressed) so the primary comparison often becomes frozen/microwave vs. restaurants. Manufacturers have done a good job of improving the quality of prepared and frozen foods the past few years, but restaurants are winning the battle of perception at the moment.
It isn’t just cost that is factored. Parents leave work and head for day care centers and school activities. Many evenings are spent sitting on bleachers with parents at different functions.
You can eat on the run or wait until you get home. It’s a way of life now. I work with 13 women in various stages of life. Most of them have children in 2 to 3 different schools. Their lives are packed full of activities that include weekends. They know where to go and what to buy when it comes to price and nutrition.
Based on the fact that many still have not come up with an answer as Ryan points out, it would seem the question is still as, if not more, relevant today as it was 20 years ago.
George makes a good point, but we need to face the fact that we are at least 20 plus years behind the curve and that — exceptions clearly and successfully in place — supermarkets still don’t get it. In addition to the economic issue there are other factors impacting the migration to foodservice ranging from an inability (or unwillingness) to prepare a meal to the inconvenience of driving to a store, picking up a meal and driving home and then eating it. Look, I know lots of supermarketers have a variety of solutions that “work” but, so far at least, they don’t scale to an industry solution. Don’t believe me? Look at the retail versus foodservice market shares over the last 20 years. I’m not disagreeing with George, just pointing out that the horse has been out of the barn so long it’s living on borrowed time.
Yes, but… First, a person’s time spent preparing food at home is not time they would be paid if they were not preparing food — it is not even lost potential income, so it cannot really be counted as money it “costs” someone to make food at home. Second, you can make a balanced, delicious, healthy meal for $50 for two or $5. Personally, if I do not eat out or carry out any food, I spend $250 in groceries a month for the two of us, and we eat very well indeed and are big eaters. Carry out twice a week, for the same amount of food, costs $250 a month, and I still have to buy groceries for the rest of the meals — for a total of almost $500 a month. Further, I can prepare a full-course dinner, just as good as an up-scale restaurant’s, in under 30 minutes, because I know how to “prep and save” in stages and in advance.
The assumption that restaurants are a better value or more efficient is not really accurate, then. This appears to be one of those topics that we might dismiss out-of-hand, but on closer view, we might find out that our own assumptions might be incorrect. Perhaps one of the biggest shifts in American cooking and restaurant patterns is not only that we cook so much less and eat out or carry out so much more, but that we have rationalized doing so. If Americans don’t know how to prepare a great meal in 30 minutes or even 15, or if they think that an “everyday” meal in the kitchen costs $30, then they truly have lost touch with the kitchen.
It seems a little late in the game to be asking this question. I think Americans figured out the economics of eating out over 20 years ago. By the way, you forgot to add in waste for households that cook occasionally, but not regularly. What are supermarkets en masse doing about it? Remember HMRs and meal solutions? Obviously some retailers like Ukrop’s, Wegmans and others have cracked the code, but the majority remain blissfully — and customerless — in the dark. This would have been a great question in about 1980.
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From what I’ve seen on my admittedly infrequent visits to the US over the past few years, there are lots of choices available to people willing to buy food for meals rather than eating out or getting take out. One of the big problems is that it involves thinking. If you go to a restaurant, you select from a menu and get instant gratification. If you go to a grocery store, you have more choices and then, even if you buy a ready meal, have to head home and take some action rather than being served. You also have to wash up and get rid of the garbage. When feeding a family you have to make decisions and choices for several people rather than letting them choose for themselves. Stores are certainly offering alternatives which I believe are always at least a little bit cheaper but people make choices and decide that they deserve to be treated well and spoiled by not having to do anything for themselves. If and when that’s the case, there really isn’t much you can do about it. It’s a much harder job to persuade them to fend for themselves even if it is buying convenience food, never mind cooking from scratch which is one area on which I am almost prepared to throw in the towel.
BUT BUT BUT there is some light at the end of the tunnel, I think, at least in the UK. More people are asking more questions about their food. More people are thinking about not only what they eat themselves but what they feed their families. When that’s the case, there is slightly greater opportunity for partnership between retailers and consumers. Perhaps that concept – partnership – could be developed further.
If people wish to spend their money on restaurant meals multiple times a week AND if they can truly afford it…more power to them. Sometimes I think families go out to dinner because they feel that’s the only way they can get everyone to sit down together, the parents and kids, without interruptions, and be able to share the day’s events. But a great many families cannot afford it yet do it anyway, then wonder why there is more month than money. Unlike so many other expenses of life — mortgage or rent, medical care and prescriptions, home heating, gasoline for the car, veterinary costs — food really is an area where there is some possibility of control.
Cooking at home is vastly less expensive than restaurant or takeout even when using the very finest and freshest ingredients along with utilizing some convenience items such as bagged salads. Cooking at home provides opportunities to far better monitor the content of the family’s food (such as fat, salt and carbs). Cooking at home with regularity gives hope that yet another generation of young men and women may learn the joys of preparing great new recipes as well as continuing old family favorites.
Grocery and specialty food stores, in my opinion, do not do enough marketing that extols the pleasures and advantages of preparing and eating meals at home.
Which is the cheaper, dishing in or dishing out? That is the question. But there’s a great deal of confusion feeding within that question since so many present-day social, recreational, work, cultural, educational and economic factors intertwine in lives today.
Each decade has seen a decrease in the number of people who are willing to trade off time in the kitchen at the expense of “necessary” or preferred activities — at any cost. This evolution in the mindsets on the marketplace has confused many grocers who are pondering what should be the definition of a grocery store today.
The restaurant industry has experienced real growth for many years, versus the grocery business, which hasn’t. Restaurant worker wages are among the lowest possible, so anyone making more than the minimum wage could say that his/her time is more valuable. Buying your own groceries has several advantages to the customer, besides the wage argument. For example: (1) individual preferences are accommodated (for quality, price, timing, quantity, etc.) and (2)it’s hard to complain about the service if you serve yourself. Whole Foods makes grocery shopping stylish and is positioned to leverage individual preferences. Very few other grocers have cracked that code. They continue to use commodity pricing and me-too services. Even though the restaurant business is full of copycats, there seems to be wider range of copycat types. Innovation expands markets.
I agree with Race – what did they make for $30? I’d imagine it wasn’t the handstuffed pasta with sauce – that’s a $10 meal that could stretch to feed 4 or make great leftovers.
It’s no surprise that this behavioral shift to dining out and convenience food has led to the increase in overweight and obesity in the US. Portion sizes have drastically increased, the ingredients in those food we’re also finding out aren’t good for you (trans-fat, hfcs among others).
The research that I’ve been reading indicates our poor diet and lack of exercise comes from ignorance. I believe this creates an opportunity for a grocer to educate and promote a balanced lifestyle, with food and the other items they sell as a centerpiece of course. Similar to the Whole Foods approach but really done on a mass market level — why not show people what 5 servings of fruit looks like (or better yet, run a demonstration in the store where they guess and if they get it right, enter to win a relevant prize)? I agree with the panel that retailers need to make a quantum leap forward.
If customers know how to shop (and cook), home cooking is far cheaper than eating out. However, food manufacturers have done such a great job over the last couple of decades with packaging prepared or easy-to-prepare items that the shopping carts tend to fill with the higher priced convenience goods and many consumers have never really learned to cook without the convenience items.
Can anyone remember the last time you bought a whole fryer, cut it up, battered and fried it in oil? Not to mention all the sides like mashed potatoes, homemade gravy, veggies and desert. (Now I’m getting hungry.) But my point is, many of us can remember our mothers preparing such meals on a routine and daily basis, often working outside the home and keeping up with the kids and their activities as well. It was cheap and good, but definitely more work than grabbing the pre-cooked foods at the deli counter or dropping by KFC.
As a society, cooking habits and the available ingredients and options have changed. Time is money. Saving time costs.
Even though restaurant meals of almost all types clearly cost more than eating at home and definitely cost more when you compare like meals to one another, the only thing that really matters is how consumers PERCEIVE the benefits of one versus another. And, there are plenty of casual restaurants these days that SEEM to be a good value, provide a quick and reasonably pleasant dining experience, and give you enough food to take home and eat again another day. Plus, we consumers are lazier than we’ve ever been (while at the same time we are time-pressed) so the primary comparison often becomes frozen/microwave vs. restaurants. Manufacturers have done a good job of improving the quality of prepared and frozen foods the past few years, but restaurants are winning the battle of perception at the moment.
It isn’t just cost that is factored. Parents leave work and head for day care centers and school activities. Many evenings are spent sitting on bleachers with parents at different functions.
You can eat on the run or wait until you get home. It’s a way of life now. I work with 13 women in various stages of life. Most of them have children in 2 to 3 different schools. Their lives are packed full of activities that include weekends. They know where to go and what to buy when it comes to price and nutrition.
Based on the fact that many still have not come up with an answer as Ryan points out, it would seem the question is still as, if not more, relevant today as it was 20 years ago.
George makes a good point, but we need to face the fact that we are at least 20 plus years behind the curve and that — exceptions clearly and successfully in place — supermarkets still don’t get it. In addition to the economic issue there are other factors impacting the migration to foodservice ranging from an inability (or unwillingness) to prepare a meal to the inconvenience of driving to a store, picking up a meal and driving home and then eating it. Look, I know lots of supermarketers have a variety of solutions that “work” but, so far at least, they don’t scale to an industry solution. Don’t believe me? Look at the retail versus foodservice market shares over the last 20 years. I’m not disagreeing with George, just pointing out that the horse has been out of the barn so long it’s living on borrowed time.
Yes, but… First, a person’s time spent preparing food at home is not time they would be paid if they were not preparing food — it is not even lost potential income, so it cannot really be counted as money it “costs” someone to make food at home. Second, you can make a balanced, delicious, healthy meal for $50 for two or $5. Personally, if I do not eat out or carry out any food, I spend $250 in groceries a month for the two of us, and we eat very well indeed and are big eaters. Carry out twice a week, for the same amount of food, costs $250 a month, and I still have to buy groceries for the rest of the meals — for a total of almost $500 a month. Further, I can prepare a full-course dinner, just as good as an up-scale restaurant’s, in under 30 minutes, because I know how to “prep and save” in stages and in advance.
The assumption that restaurants are a better value or more efficient is not really accurate, then. This appears to be one of those topics that we might dismiss out-of-hand, but on closer view, we might find out that our own assumptions might be incorrect. Perhaps one of the biggest shifts in American cooking and restaurant patterns is not only that we cook so much less and eat out or carry out so much more, but that we have rationalized doing so. If Americans don’t know how to prepare a great meal in 30 minutes or even 15, or if they think that an “everyday” meal in the kitchen costs $30, then they truly have lost touch with the kitchen.
It seems a little late in the game to be asking this question. I think Americans figured out the economics of eating out over 20 years ago. By the way, you forgot to add in waste for households that cook occasionally, but not regularly. What are supermarkets en masse doing about it? Remember HMRs and meal solutions? Obviously some retailers like Ukrop’s, Wegmans and others have cracked the code, but the majority remain blissfully — and customerless — in the dark. This would have been a great question in about 1980.