Midwest Tops in Restaurant Spending (Restaurants USA, July 2002)

July 2002 issue

Midwest Tops in Restaurant Spending

Restaurants USA magazine's final issue was published in September 2002 but these archived articles remain available for our readers' convenience.

Restaurants USA, July 2002

Growth in the amount of money Americans spend on food away from home slowed in 2000, according to the latest data. The Midwest led all regions in expenditures.
By Robert Ebbin

July 11, 2002

According to the National Restaurant Association’s Restaurant Spending—2000, expenditures on food away from home rose 1 percent in 2000, compared with a 4.2 percent increase in 1999. Consumer expenditures on food at home gained 3.6 percent in 2000 after registering a 4.9 percent gain the previous year.

The typical American household spent an average of $2,137 on food away from home in 2000. The Midwest led all four Census regions in expenditures with $2,322 per household or $929 per capita. The West posted the second-highest total and per-capita spending on food away from home ($2,285 and $879, respectively). Per-capita expenditures on food away from home averaged $855 during the same period.

The data indicates that households in metropolitan areas tended to spend more on food away from home than households located in non-metropolitan areas. Households in San Francisco posted the highest total and per-capita spending on food away from home among 28 metropolitan statistical areas for which data was available. In 1999-2000*, households in San Francisco spent an average of $3,086—or $1,234 per capita—per year on food away from home.

Households in Cincinnati allocated the largest proportion of their total food budget to food away from home (48.8 percent). Dallas/Fort Worth ($1,191), Cincinnati ($1,164), Seattle ($1,126) and Minneapolis/St. Paul ($1,109) round out the top five metropolitan areas in per-capita spending on food away from home.

Income’s Impact

Household spending on food away from home is heavily influenced by a variety of demographic characteristics, of which household income is one of the most significant factors. Expenditures on food away from home rose dramatically for households with income before taxes of $30,000 or more.

Households with an average income of $70,000 or more accounted for a larger percentage of spending on food away from home than their share of the population. In 2000, these households accounted for 35 percent of total spending on food away from home, despite comprising only 19 percent of the population.

Households in this income bracket spent an average of $4,182—or $1,307 per capita—on food away from home in 2000 and allocated the largest share of their total food dollar on food away from home (48.3 percent). In contrast, households with an income before taxes between $15,000 and $19,999 spent an average of $1,187—or $540 per capita—and allocated 31.7 percent of their total food dollar on food away from home in 2000.

Spending by Age

The age of the household head is another important demographic characteristic influencing restaurant spending. Households headed by persons under age 25 spent 48.8 percent of their total food dollar on food away from home—more than any other age group. Consumers in this age bracket often are beginning their careers and, consequently, usually earn less than older consumers. As a result, although they spent the largest share of their food dollar on food away from home, total spending on food away from home by these households was well below the nation’s average for all households.

Adults between the ages of 35 and 54 are in the prime of their earning potential and their higher incomes result in higher spending on food away from home. However, adults age 35 to 44 also are in their prime child-raising years. As a result, although these households spent the second-largest total amount on food away from home, their higher average household size (3.2 persons) brought their per-capita restaurant spending down.

In 2000, households headed by adults age 35 to 44 allocated an average of $2,607 to food away from home, but spent only $790 per capita. Households headed by persons age 45 to 54 spent the most in total and the second-most per capita on food away from home in 2000—$2,638 and $977, respectively. Households headed by persons between the ages of 55 to 64 spent the most per capita on food away from home in 2000—$999.

Households headed by persons 65 years or older allocated an average of $1,205—or $709 per capita—on food away from home in 2000.

Spending by Household Size

Although one-person households posted the highest per-capita spending on food away from home ($1,348) and allocated the largest share of the food dollar on food away from home (47.7 percent), those households spent less than the nation’s average. Two-person households had nearly double the household income of one-person households and allocated a larger total amount on food away from home than one-person households.

Per-capita spending by two-person households ($1,105) was lower than that of one-person households. Larger households generally allocated a smaller portion of their total food dollar on food away from home and, as a result, posted lower per-capita spending. In 2000, households with two or more persons allocated a total of $2,454—or $792 per capita—on food away from home.

Spending by Household Composition

Household composition is also an important factor influencing restaurant spending. Although total spending on food away from home posted by households consisting of a husband, wife and children was 35 percent above the nation’s average ($2,894 versus $2,137), households consisting of only a husband and wife posted the highest per-capita spending on food away from home ($1,210).

The addition of children increases household size and results in lower per-capita spending on food away from home. However, restaurant spending increases as children get older. In 2000, households with the oldest child age 18 or older spent roughly 34 percent more per capita on food away from home than households with the oldest child under age 6 ($825 versus $617).

Spending by Number of Wage Earners

Both household income and total spending on food away from home rise with the number of wage earners in a household. Due to their larger-than-average household size, per-capita expenditures decline as the number of household earners rises. Employed persons living alone posted the highest per-capita expenditures on food away from home ($1,741) and allocated the largest portion of their total food dollar (54.4 percent) on food away from home. Among multi-person households, those with two earners recorded the highest per-capita spending on food away from home ($900).

Spending by Occupation

Persons employed in managerial and professional occupations posted the highest total and per-capita spending on food away from home ($3,090 and $1,188, respectively). Managers and professionals allocated the highest proportion of their total food dollar to food away from home (47.6 percent). Self-employed persons, technical, mechanics, and sales, clerical and construction workers also posted above-average total expenditures on food away from home.

*To create adequate sample sizes for metropolitan statistical areas, the U.S. Department of Labor, Bureau of Labor Statistics combined data from the 1999 and 2000 Consumer Expenditure Surveys.

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Robert Ebbin is director of research projects at the National Restaurant Association.