Breaking News Emails
If it feels like you’re spending a lot of your budget on groceries these days, consider this: At least you don’t live in France, Brazil, Russia – or most any other country in the world.
Americans devote a smaller portion of their overall budget to groceries than most anyone else in the world. That includes both developed countries such as Germany and Japan and developing countries such as the Philippines or Kenya.
“(It’s) one of the lowest in the world,” said John Baffes, a senior agricultural economist with the development prospects group at the World Bank.
That’s despite the recent jump in grocery prices, especially for beef and pork, which has caused Americans to experience a bit of sticker shock in the meat aisle and elsewhere. And it’s because of a wide variety of factors that benefit American consumers, ranging from the country’s bountiful agriculture industry to its intensely competitive food retailers.
“We’re not highly dependent on other countries for our basic food.”
“We’re not highly dependent on other countries for our basic food,” said Annette Clauson, an agricultural economist with the United States Department of Agriculture.
Americans spend around 6 to 7 percent of their disposable income on food they eat at home, according to estimates from the U.S. Department of Agriculture and elsewhere.
That compares to about 10 percent of consumer budgets in developed countries, and as much as 50 percent in the poorest developing countries, Baffes said.
Part of the reason Americans spend less of their discretionary income on food is because U.S. consumers are wealthier than consumers in many other countries, giving us more money overall to spend. That means Americans can devote less of their total budget to a greater variety of foods, such as fish, meat, dairy and processed foods, while people in less developed countries are putting more of their money into basic foods, like wheat and rice.
But that’s not the whole story, especially when it comes to how much we spend compared to other wealthy nations.
Experts say one big factor is food production. Food has become a global industry, but Clauson said Americans still produce a fair amount of the grains, fruits, vegetables and meats that we consume, and we do so in a relatively efficient and cost-effective way. That saves us from having to pay extra to have that food shipped from elsewhere.
The United States also benefits from cheaper land and energy prices for food production compared to other developed countries, said An Hodgson, income and expenditure manager with the consumer market research firm Euromonitor.
Hodgson noted that bulk prices for foods like chicken and beef are considerably cheaper than those same foods purchased in France, a comparable developed nation.
American consumers also benefit from our famous retailing culture - those big grocery stores and other retailers that offer food, often in bulk, at prices designed to lure you from the next store over.
“The competition certainly holds prices down,” Clauson said.
Americans’ grocery bills are also lower in part because our restaurant tabs are higher.
It’s generally true that wealthier people tend to eat out more, and Baffes said Americans are especially apt to choose having someone else prepare our food over buying it at the grocery store to cook at home.