Dining out vs. cooking in as inflation rises

by Emaryi Williams-

BLACKSBURG — The prices for food increased last year by 10.4%, the largest yearly increase since 1981, according to the U.S. Bureau of Labor and Statistics’s Economics Daily. 

The Consumer Price Index refers to the ​​measure of economy-wide inflation, which has impacted many consumer goods and services, including food prices.

“This is important because it gave us important information about cost of living,” said Virginia Tech economic professor Shaowen Luo about the relevance of the consumer price index.

Luo explains that it is not the absolute price changes that are affecting the everyday American, but the relative price change.

“If everything in the U.S. market increased by 10.4%, including your wage, then your life is not affected,” she explained. For those who did not see a 10.4% income increase, Lou says the rise in food prices may impact their lives.

According to Blacksburg officials, the city is currently seeking ways to combat food insecurity in the area.

“We got some ARPA funds from the federal government,” said Blacksburg Town Manager, Marc Verniel. “One of the projects we’re looking at is to fund local nonprofits that are already helping people get good healthy food.”

Virginia Tech Professor of Finance Derek Klock list many factors to consider that have affected inflation, including the coronavirus, the war in Ukraine and increased demand.

“Whenever you have a supply chain disruption to the extent we’ve had over the past three years globally, all prices are going to rise,” he said.

While both stores and restaurants have seen spikes in food prices, according to a 2023 Food Price Outlook created by the U.S. Department of Agriculture’s Economic Research Service, between September 2021 and September 2022, the prices of food in restaurants increased up to 8.5%, while the prices of food at stores increased 13%.

“I feel like going out and eating in ends up costing the same in the end because groceries are pretty expensive,” said Emma Larkin, a Virginia Tech off-campus student who frequents Kroger.

Despite price differences, Professor Klock warns the public about assuming that prices at restaurants will always compare better than those at the grocery store.

“Grocery store prices have gone up a lot, and restaurants will have to follow suit. Eventually, restaurants are going to have to pass on those increased prices to consumers,” he predicts.

Klock explains that since the pandemic, restaurants have held back passing raised prices to customers because people have just started eating out again. He says, for restaurants to stay in business, they are going to have to raise their prices soon.

Professor Luo says, there are many aspects to consider when determining whether eating in or eating out is more costly.

Diet is one that she specified as a critical factor. A vegan and vegetarian diet could cut a person’s food costs by up to one-third, according to a study done by the Lancet Planetary Health.

“Some people may value having food outside much higher than cooking at home,” Luo said. “It also depends on your budget constraint – whether you are high-income people or low-income people. So, it’s complicated.”