In March, Americans shopped at the grocery store like it was 1996

US spending at grocery stores jumped by 26% in March.
US spending at grocery stores jumped by 26% in March.
Image: Reuters/Kevin Lamarque
We may earn a commission from links on this page.

Covid-19 has Americans shopping at grocery stores like it was the 1990s. In March 2020, almost 63% of food and drink bought by US consumers was purchased at stores. This was the highest share since January 1996, according to data from the US Census.

The share of food spending at restaurants and bars (including takeout) has been slowly rising for for over half a century. In 1970, only about one quarter of US household expenditures were spent on eating out. By the beginning of 2020, that number had reached about 50%. The Great Recession slowed down the move to eating out from 2008 to 2012, as researchers at the Federal Reserve Bank of St. Louis noted, but only a pandemic could truly reverse the trend.

There are two main reasons that spending on store-bought food is declining in relative importance.

One, groceries are cheap. The rise of large chain grocery stores, like Walmart, and increasingly efficient agriculture and food production technology drove food prices down (particularly for prepackaged foods). At the same time, eating out has continued to get more expensive, since labor is a much larger share of costs for restaurants than supermarkets, which is not getting any cheaper.

Two, as an increasing number of women have entered the labor force, there is no longer a member of the home expected to cook (when a member of a heterosexual couple does cook, it is more likely to be the woman). People have turned to eating out or ordering in for convenience, and the ability to spend their time on work or leisure. Currently, due to shelter-at-home orders, people both have more time to spend on cooking and may be worried about the health consequences of ordering in.

The March spike in the share of food spending at grocery stores is likely to continue into April and beyond. While credit card data (pdf) suggests some of the increase in grocery store spending was a result of people stocking up in the beginning of March, the decline in restaurant spending has been even greater and will likely continue—data from market research group NPD shows restaurant and takeout orders continuing to plummet in April. The US is heading back to a period when people prepared most of their meals.