Americans spend a ton of money on food.
Between groceries, dining out, and ordering delivery, food accounts for 12.5% — just over $US7,000 in the average budget — of annual expenditures, according to the Bureau of Labour Statistics.
Dining out at restaurants is a favourite, totaling 43% of the average family’s food budget.
Millennials tend to shoulder a lot of this blame, as research shows they’re typically spending more than previous generations on pricey restaurant dinners.
But when you toss out the share of food budgets spent on dining out, spending trends show millennials may be more traditional than you think. According to new data from online lender Earnest, millennials are opting for physical grocery stores over online ordering.
Earnest analysed a total of 2.5 million transactions from tens of thousands of loan applications, for which the average age of applicants was 32, between January 2016 and August 2017. Earnest focused only on purchase data for “eating in.” This included physical grocery stores, grocery delivery, restaurant delivery, meal kit services, and prepped meals.
According to the data, a strong loyalty toward traditional grocery stores remains among millennials, with a whopping 90% of overall “eating in” spend going toward brick-and-mortars.
Despite the rise of mobile food ordering and apps like Instacart, Fresh Direct, and Amazon Fresh, millennials dropped just 8% of total food spend — accounting for 12.5% of total food purchases — on restaurant and grocery delivery. Meal kits accounted for 2%, while prepped meals were less than 1%.
Millennials’ most frequented grocery stores included Costco (34.5% of all grocery store spending), Kroger (20%), and Whole Foods (16%).
This could be good news for Amazon. Despite having invested heavily in its grocery arm and still coming up short of the competition, the online giant could land favourably with millennials who prefer brick-and-mortars thanks to its acquisition of Whole Foods, which is offering new, lower prices for shoppers.
Still, it doesn’t appear millennials are opting for physical stores to save money.
In fact, they’re spending about $US21 more a month shopping in-person rather than online, according to Earnest. In total, the average customer spent $US155 in brick-and-mortars, which they visited 3.2 times per month.
It’s important to note that the data was presented on a national scale, and there are variances across regions. For instance, the share of millennials purchasing food delivery nationally is small, but it’s more prevalent in some states than others. In New York, Illinois, Pennsylvania, Delaware, and Washington DC, more than 31% of millennial customers’ food purchases were grocery and restaurant delivery.
And by the way: They also aren’t spending as much money as you thought.
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