Thursday, December 22, 2011

Why is it Suddenly Cheaper to Eat Out?

Americans spend nearly 4.5 percent of their paychecks on dining out, an amount that has been rising steadily since 2009.While groceries to be prepared at home still account for a higher share of most families' budgets, a new report by Bank of America Merrill Lynch (BAML) suggests that it's actually less expensive for Americans to eat out.How can this be? 

Are Rising Food Prices Making Restaurants More Economical Than Eating In?

If you've visited a grocery store recently, it's hard to ignore the rising food prices.

Earlier this year rising grain costs recently pushed world food prices to near-record levels! However, if you live in the United States it is not so much that the price of food is rising; the problem is that the value of the U.S. dollar is being decimated and will continue to decline as long as the U.S. Federal Reserve continues printing trillions of dollars out of thin air, thereby creating inflation. This, in turn, leads to a devaluation of the dollar and an increase in prices for most commodities, including food.

Still, food prices have been rising at about 2.5 times the rate as restaurant meal prices, and grocery stores tend to pass these price increases right on to the consumer. Restaurants, the BAML report suggests, are able to offset some of those costs by buying food in bulk or reducing wages, so the consumer is somewhat insulated from rising food costs when they eat in a restaurant.

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