New Survey Shows 71% Of The Middle Class Is Cutting Back On Takeout
Inflation has hit supermarket shelves everywhere. While that is the most direct way the average member of the public will notice rising prices, higher food prices relative to what people can actually spend also hurt the restaurant industry.
Some have made the counterintuitive argument that inflation will, in fact, help the restaurant industry. According to a survey PopMenu shared with Yahoo Finance, 40% of monthly food budgets will go towards restaurants of some kind. This is because rising food prices make cooking at home more expensive. "With grocery prices going up, the economics between dining out at a restaurant and using groceries to make a meal are not so different anymore," argued Brendan Sweeney, CEO and Co-founder of PopMenu. Moreover, eating out brings a level to normalcy to a time in which very little can be called normal.
However, as Robert McCaroll, the owner of Lake Grove's The Good Steer, told CBS, between the higher prices of food and the high prices of fuel for customers to even drive out to them, business has been tough. Perhaps people will choose to eat out, but there is a lot of pressure against what could be considered an indulgence.
The argument doesn't hold water
This issue is that many more surveys have found that consumers don't buy the idea that it is cheaper to eat out.
Primerica, a financial services provider for middle-income households, took it upon themselves to quantify how inflation has altered the habits of their customer base. According to a press release, they conducted a survey that discovered most people are concerned and are rethinking their finances. Concern over how to pay for groceries grew by 4 percentage points between March and July to 26%. This has caused 49% to decide to more carefully budget their groceries, as opposed to the 37% who said they were doing so in March.
Similarly, the percentage of respondents who said that they would cut back on going to restaurants and ordering take out grew from 57% in March to 71%.
CNBC shared the results of a similar poll by Harris Poll that found 52% were taking fewer trips to the store, 45% began buying more generic brands, and 40% stopped eating out. Restaurant Business covered a poll with the even more extreme result that 84% stopped going to restaurants as frequently and 76% reduced their time going to bars. If inflation continues as it does, we might have another pandemic-like threat to the restaurant industry.