Why You Might Want to Cancel That Restaurant Reservation
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The cost of dining out rose 3 percent in May year-over-year, while the amount paid to eat at home inched up just 0.6 percent. The growing disparity in prices could prompt consumers to abandon restaurants for home-cooked meals, according to a report today by Bloomberg.
“Eating in hasn’t been this attractive compared to dining out since 2010,” Bloomberg reports. That’s good news for consumers worried about their budgets, but could be a problem for restaurants’ bottom lines.
So far, consumers aren’t making the shift. This spring, spending at restaurants and bars totaled more than sales at grocery stores for the first time.
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Part of the reason consumers are sticking with restaurants could be that wages are starting to slowly increase, so consumers have a little more money to spend on meals.
They may also be dining out because it’s often an easier option. Shopping and preparing meals takes time – time that people simply don’t have these days. A quarter of employees say that they are working after the standard work day has ended, and about 40 percent work at least one weekend a month, according to Staples Advantage. That leaves little time for food prep.
Supermarkets have responded to the time-pressed consumer by increasingly offering prepared meals that require little more than reheating at home. The prices for such meals tend to be higher than the cost of their ingredients but less than the price of eating out or ordering in.
Will Trump's Tax Cuts Really Happen? Economists Are Surprisingly Optimistic
Despite all the thorny questions swirling around President Trump's nascent tax reform plan, 29 of 38 economists surveyed by Bloomberg in a monthly poll said they expect Congress to cut taxes by November of next year.
The hitch: The economists don’t expect the cuts will help the economy much. The median projection of a larger group of 71 economists is for 2018 growth of 2.3 percent, up only slightly from 2.1 percent this year — and by 2019, the economists see growth slipping back to 2 percent.