Food Prices and Spending
Retail food prices partially reflect farm-level commodity prices, but other costs of bringing food to the market (such as processing and retailing) have a greater role in determining prices on supermarket shelves and restaurant menus. Monthly price swings in grocery stores for individual food categories, as measured by the Consumer Price Index (CPI), tend to smooth out into modest yearly increases for food in general. In 2022, U.S. consumers, businesses, and government entities spent $2.39 trillion on food and beverages in grocery stores and at other retailers as well as on away-from-home meals and snacks.
For a typical dollar spent in 2022 by U.S. consumers on domestically produced food, including both grocery store and eating-out purchases, 34.1 cents went to foodservice establishments such as restaurants and other eating-out places. For the remainder of the food dollar, retail trade (12.4 cents) decreased to its lowest share since 1995 and wholesale trade (10.7 cents) decreased to its lowest share since 2011. Food processing (14.4 cents) also decreased to its lowest share since at least 1993, the first year recorded in the series.
In 2022, food spending by U.S. consumers, businesses, and government entities totaled $2.39 trillion, after a sharp decline in 2020 in which the food market was disrupted by the Coronavirus (COVID-19) pandemic and the recession. U.S. food spending in 2020 totaled $1.81 trillion. Food-at-home spending increased from $954.7 billion in 2021 to $1.05 trillion in 2022 and food-away-from-home spending increased from $1.16 trillion in 2021 to $1.34 trillion in 2022. Food-away-from-home spending accounted for 56 percent of total food expenditures in 2022.
U.S. consumers spent an average of 11.3 percent of their disposable personal income on food in 2022— reaching levels similar to the 1980s. The share of disposable personal income spent on food in 2022 was divided nearly equally between food at home (5.62 percent) and food away from home (5.64 percent). The share of disposable personal income spent on total food has trended downward—driven by a decline in share of income spent on food at home. In 2020, during the Coronavirus (COVID-19) pandemic, the share of disposable income spent on total food presented the sharpest annual decline (8.2 percent) since 1967. In 2022, the share of disposable personal income spent on total food had the sharpest annual increase (12.7 percent)—driven by an increase in the share of income spent on food away from home.
As their incomes rise, U.S. households spend more money on food but it represents a smaller share of their income. In 2022, households in the lowest income quintile spent an average of $5,090 on food (representing 31.2 percent of income), while households in the highest income quintile spent an average of $15,713 on food (representing 8.0 percent of income).