Do Americans Eat In Or Out?
In the aftermath of today’s woeful results from Macy’s, Kohl’s and Nordstrom’s, It may sound surprising, but there is one US industry that is doing even worse than “bricks and mortar” retail – restaurants. For those unfamiliar, we urge readers to skim our latest analysis of the state of the US restaurant indstry, which just suffered its worst monthly collapse since 2009. For everyone else, ahead of tomorrow’s retail sales report, here are some evening thoughts from Bank of America on the divergence in eating patterns across America.
In a note looking at “City Eating” (vs everything else) BofA investigates changes in how consumers eating habits. The bank asks the following questions: 1) Has there been a shift toward online shopping for groceries? 2) Are there differences based on demographic group? 3) How do urban consumers allocate spend on food vs. suburban/rural? This is what it found.
We created a proxy for online grocery stores which is representative of the sector but unlikely comprehensive, making up only about 1% of average household spending on groceries. Card spending for this aggregate has increased at a roughly 50% yoy pace since 2015. Digging deeper by demographic group, we find that spending by Millennials at online grocery stores has increased 750% since 2012 and is running at a 55% yoy pace since 2015. Generation X and Baby Boomers have also increased spending at online groceries but at a much more modest rate.
The story is also fascinating on a regional level. We don’t have sufficient data to test online grocery shopping regionally, but we can look at broad food consumption trends. We break the data into major cities (defined as densely populated regions), cities, suburban and rural. The standout comes from major cities where a greater share of food consumption is from dining out versus groceries (Chart of the month). The combination of competition from online grocers and greater urbanization may continue to present a challenge to the standard grocery store model.
What does this tell us about the consumer? Our internal data shows how innovation is changing how the consumer spends money, even on ‘necessary goods such as groceries. In our view, this will continue to create disturbances to the retail sector, impacting trends in job creation and creating downward price pressures.
Finally, here is the visual answer to the question posed in the title.
Source: http://silveristhenew.com/2017/05/11/do-americans-eat-in-or-out/
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