Dust Off the Pots and Pans
When inflation was at its peak, cooking at home simply wasn’t as cost-effective given the rising cost of groceries (remember egg-flation?). For many Americans cooking a meal at home cost nearly as much as going out to eat at a restaurant, and so ate out more.
Now that trend seems to be reversing, making cooking at home once again an effective money-saving strategy.
High Costs, High Prices
Grocery prices are still up, but just 2.1% year-over-year, the lowest rate since June 2021. Meanwhile, restaurant costs have increased significantly year-over-year: 4.3% for full-service meals, and a whopping 6.2% for limited-service meals, or fast food.
The cost of labor, real estate, maintenance, and inventory have sky-rocketed for restaurants. And that increased cost of running their business has been the driving force behind elevated prices.
Fast food prices have also been increasing steadily since the pandemic. McDonald’s (MCD) raised its menu prices around 10% in 2023, as it had in the year prior. Chipotle (CMG) has increased its prices five times since June 2021, and both Pizza Hut (YUM) and Subway have raised prices for select menu items.
Who Cooks at Home?
The trend of cooking at home is especially pronounced among older and wealthier Americans.
Millennials and Gen Zers increasingly prefer to spend on experiences, including at restaurants. But as the cost of dining out continues to rise, Americans looking to save may want to remember the benefits of a home-cooked meal.
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