The American economy is shifting
For the first time ever, Americans are spending more on dining out than on groceries. In a recent retail sales report, the hints at a generational shift become abundantly clear: millennials are not interested (by and large) in cooking at home; they prefer dining out. This has restaurants thinking more and more about how to cater to them to ensure they continue to dine out.
According to Bloomberg’s report, as of March, sales at restaurants and bars surpassed those at grocery stories for the first time since the Commerce Department started collecting data in 1992.
Perhaps this is because the millennial generation is poised to overtake the baby boomers this year as the nation’s largest living generational class.
The National Restaurant Association, with almost 500,000 industry members, is finding that the newer generation does things quite differently than their older counterparts.
Millennials favor fast food
Millennials are more willing to spend on “food away from home” because they view dining out as a chance to reconnect with friends and family, an opportunity that may otherwise be missed.
The Restuarant Association states, “[millennials] tend to favor fast food, deli food and pizza restaurants over coffee shops, high-end dining and casual dining. Their diversity and interest in new things draw them to more ethnic restaurants too.” Perhaps this also explains the recent trend we’ve seen in restaurants adding tablets to tables in order to expedite service.
Generations spend differently
An additional survey by Gallup, found that older Americans are expressing less desire to spend on dining out, but rather prefer to spend money on grocery trips; the opposite of millennials.
The majority of 51 to 69-year-olds said they are spending more on groceries compared with only a year earlier. This outweighs baby boomers who said they are spending less by 45 percentage points. Whether this age group is spending less on dining out because they are trying to save money, or just because they generally have no desire to go out is unclear.
There’s a catch with the data
One thing to consider, however, regarding these numbers: the report does not include food items purchased at stores like Wal-Mart, Costco, and Target because they are considered, “general merchandise retailers.”
So, many Americans may still be buying groceries, just not at traditional grocery stores.
#FoodSpending
