Americans Really Don’t Spend That Much (as a Percentage of Disposable Income) on Groceries

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groceries, groceries and health, spending on groceries
If we were willing to spend just a little more on groceries, this is what we’d be buying.

In week’s post, Eating Healthy Doesn’t Have To Be Expensive So Stop Whining About It, which has been our most successful post to date, I took a look at how a large portion of many American’s grocery budget goes toward junk and how, if we were willing to spend our money differently, we could eat much healthier without increasing the amount of money we spend on food.

This week, I’m revisiting the issue, but taking a slightly different look at it.  This week, I’m focusing on the percentage of disposable income we (Americans) spend on our food, and how much this percentage has decreased over the years.

According to the USDA, back in 1929, the average American family spent 20.3% of its disposable income on “food at home” which you can read as “groceries.”  Since the end of the 1930s, this percentage has fallen steadily and dramatically and, as of 2010, the average American family spent about 5.5% of its disposable income on groceries.

You can get this information first hand and see all of the data from 1929 to 2010 by clicking here and checking out “Table 7 – Food expenditures by families and individuals as a share of disposable personal income” in Excel.

How does America stack up against the rest of the world?  According to an interesting article on Mother Jones entitled “America Spends Less on Food Than Any Other Country” we spend less as a percentage of income than other industrialized nations (9% for Great Britain, 14% for France), and way less than developing nations (25% for Brazil, 35% for India, 45% for Kenya).

Taking developing nations out of the equation, it looks like grocery spending as a percentage of disposable income in America is about half of what the rest of the industrialized world spends.  I think that’s pretty significant, especially when you take into consideration America spends more on health care than any other nation in the world.

Now, I understand that between 1929 and now there have been amazing technological advances that have helped to drive down the cost of food production, and this is a very large reason why, as a percentage of disposable income, money spent on “food at home” has decreased.  That being said, that doesn’t tell the whole story.

At the end of the day, this tells me that most of us simply do not make it a priority to eat healthy.  Instead of living a more modest lifestyle and spending more on healthy food, we’d rather have over-sized homes, nice cars, and fancy things.

Here are some other interesting resources for you to read at your leisure:

So, what are your thoughts on this?  Leave a comment below and let others know what you think!

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Comments

  1. Mari says

    I don’t believe this to be true at all, If someone making 70k a year spent 5% of their take home pay on groceries that would be around $220 a month. I’ve seen this question discussed in many places and that might be closer to what is spent per week for the average smaller family. Paleo or not.

  2. Dan says

    I agree with the theme of this article and the disparity between proportion of income spent on food v. health care, but its missing far too many constraints. Yes, Americans are spending historically less money on food even though food costs are rising, and spending more on health care costs. Here is my issue. The article ignores the fact that consumerism has changed dramatically in the U.S. since 1920. We are spending a far greater proportion of our income on large homes, cars, accessories — THINGS. Consequently our percentage of disposable incomes spent on food will decrease. You also don’t mention exogenous factors which artificially increase the costs of health care, majorly, government. Compare health care costs to what they were in the 1960s and prior. There is a great deal of research pointing to government’s role in increasing the costs of health care and education, therefore, again, decreasing percentage of income spent on food. You do acknowledge that food manufacturing in contemporary agriculture is more efficient now, ultimately reducing costs, which is a huge player in the disproportion. Finally, one could argue that the greater percentages of incomes spent on food in foreign countries (India, Brazil, etc.) does not necessarily suggest that those countries are “healthier.” Although I would agree that food is quite possibly the most significant factor in Americans’ poor health, environmental conditions are another large factor (but difficult to quantify) in determining health not only in the U.S. but in those other countries you mentioned. All I’m saying is, developing countries will obviously spend a greater share of income on food because they have less money and/or less “things” to buy, therefore are inadequate to compare to the U.S. without improved evidence. It is difficult to report on these things as you have done, and I give you credit for bringing attention to them because they are important (and, in the end I agree with your synopsis) but there are too many factors involved to report on without extensive technical analysis.

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