Annual U.S. food spending declined for the second time in 25 years - USDA

Annual U.S. food spending declined for the second time in 25 years - USDA

Annual U.S. food spending declined for the second time in 25 years - USDA

For the past 25 years, U.S. food expenditures generally followed several predictable trends. However, in 2020, people in the U.S. spent approximately $1.56 trillion on food, showing a 5.3 percent reduction from the $1.65 trillion spent in 2019, according to a report from the USDA.

The disruption of trends in food spending can be attributed to the pandemic limiting mobility of U.S. consumers and the economic recession that came with it for most of 2020.

The drop from 2019 to 2020 was only the second time total food expenditures decreased over the last 25 years, with the other time in 2009 during the Great Recession.

The decrease in total food spending in 2020 was driven by an 18.3 percent drop in spending at restaurants and the like. Because of the additional cost of eating away from home, that decrease outweighed an 8.5 percent increase in food-at-home (FAH) spending as consumers shifted to buying more food from retailers.

In April of last year, U.S. consumers spent about two-thirds of their food dollars at FAH retailers, the highest value on record. FAH and food-away-from-home (FAFH) spending increased 7.9 percent and 36.2 percent, respectively, from April to May 2020.

This increase may be due in part to the stimulus checks and increased unemployment benefits that were provided with the enactment of the CARES Act at the end of March 2020. However, FAFH spending in May 2020 was still lover than the previous year, while FAH spending was higher.

The last quarter of 2020 saw monthly increases in FAH spending, an expected outcome of colder weather and holiday meal preparation, which resulted in record-high FAH spending in December.

FAFH spending decreased in November by 10 percent and showed a slight increase in December but remained well below 2019 levels.

While COVID-19 vaccine distribution for select groups began in the United States in December 2020, the post-pandemic landscape of the economy remains unclear.

The USDA, Economic Research Service will continue to monitor the effects of the pandemic on food expenditures as more data become available and will examine possible long-lasting behavioral changes in the way people purchase food.

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