Spending on food falls by 5.3% in US

2020 was only the second year in the past quarter of a century that household expenditure on food in the US dropped. The total spend of around US$1.6 trillion represents a 5.3% fall from 2019, according to a USDA report. The disruption of the trends in food spending can be attributed to the pandemic limiting mobility of consumers and the economic recession that accompanied it. The last fall in spending was in 2009 during the recession.

The decrease in total food spending in 2020 was driven by an 18.3% drop in spending in the food service channel, which was not offset by the 8.5% 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 was up 7.9% and 36.2%, 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.