Is Eating Out Cheaper Than Cooking?

Americans are dining in restaurants more than ever, and with eateries trying to hold the line on prices, it's not necessarily a big money-saver to buy your own groceries.

By Christian Science Monitor

By the time he's driven to the farmers market, bought the organic veggies and spent an hour cooking a meal for himself and his wife, Mark Chernesky figures he's spent $30.

That's why recently, after fighting rush hour, the Atlanta multimedia coordinator dashed in to Figo, a pasta place, for hand-stuffed ravioli slathered with puttanesca sauce. "I'll get out of here for $17 plus tip," he said.

Crunch the numbers, and across America the refrain is the same: Eating out is the new eating in. Even with wages stagnant, time-strapped workers are abandoning the family kitchen in droves.

"When I add my hourly rate, the time to cook at home, I can instead take my family out to dinner, and it comes out pretty even," said Paul Howard, a manager-instructor at Café Laura, a restaurant run by college students at Pennsylvania State University in University Park, Pa.

Yet restaurants contend with concerns about poor service as well as oversize portions, which contribute to the expanding waistlines of Americans. And some Americans still find that cooking their own food at home is less expensive than going out.

But many are choosing to eat out because they don't have time to cook for themselves or their families. For example, 60% of mothers work outside the home. Leaving Mom's family table for plasma-TV plastered lounges is also about the capitalism of the kitchen: Restaurateurs are absorbing rising food and gas costs to keep menu prices low.

For the first time this year, American restaurants will bring in above a half-trillion dollars in total sales, according to the National Restaurant Association. The U.S. has about 925,000 restaurants, and at least 8,000 are added each year.

Restaurant-association surveys indicate diners increasingly view restaurants as extensions of their own homes, and a large percentage would like to see table-top televisions installed at their favorite eating joints. In the next decade, more than half the average household food budget will be spent on meals bought outside the home, compared with 25% in 1955, the association reports.

Restaurants 'essential' to daily life

"The restaurant industry has become more essential to consumer daily lifestyles than at any point in history," said Hudson Riehle, the restaurant association's senior vice president of research.

For Leah McAllister, an advertising representative who lives near Atlanta, the rigors of work and family contribute to her decision to eat out frequently. On a recent night, she pushed her baby toward Taqueria del Sol, a Mexican eatery in downtown Decatur, Ga., for a plate of Memphis tacos.

Within a block, she had other options, including tsukemono vegetables at Sushi Avenue, rock-shrimp tacos at the Key West Fish House and organic Sonoma duck breast for $15 at the Supper Club.

The biggest reason for the shift in her lifestyle: grocery-store prices. Just the other day, she paid $8 for a package of chicken wings and was shocked that they cost so much. "I was raised that everyone came home and ate around the family table, but now we eat out at least three times a week," McAllister said. "It's easier, and sometimes it's cheaper."

Despite all the money Americans spend on eating out, restaurants' profit margins are below 5%, the National Restaurant Association says. A dearth of new cooks and waiters has meant the end of many eateries. But cutthroat competition among restaurants has helped them produce good food at low prices, experts say.

"Restaurants aren't winning on their sophistication of pricing -- they're winning on their ability to deliver value," said Mark Bergen, a pricing specialist at the Carlson School of Management at the University of Minnesota. "Simply put, restaurants are more efficient than you are."

Restaurant food costs went up more than 5% from the previous year in 2003 and 2004. Yet entrees stayed at much the same prices. Restaurants quietly raised prices for appetizers, alcohol and desserts. Bundling and hard-selling specials are other tactics that focus on high-margin items. The industry, too, is using automation techniques to keep costs low: Computers keep track of traffic and beep to tell managers when to send employees home.

But restaurants have been tackling their share of problems. Most turn over more than their entire staff each year, a rate that has contributed to a decline in service over the past 10 years, experts say.

Weight problems linked to restaurant meals

Eating out is also considered a major cause of obesity in America, according to a recent report by the U.S. Food and Drug Administration. The report helped prompt New York City's health department to announce a plan to ban unhealthful trans fats from city kitchens. The plan also makes restaurants with standard menus list calorie counts of items.

Even as restaurants continue to add menu items that are fewer in calories and healthier, bold changes have failed, experts say. Ruby Tuesday restaurants recently reduced portion sizes, which patrons panned.

"Portion size is a huge issue," said Howard, of Penn State's Café Laura. "Society and research is saying we eat too much, but when you try to come up with (smaller) portions, customers hate it."

The fact that restaurant meals are favored over homemade dinners bothers some. Martin Shehan of Quail Valley, Calif., is not convinced that eating in is just as expensive as eating at restaurants. The economics of a slab of salmon on the grill disproves that, he said.

"My philosophy is, if it's not in the freezer, you can't eat it," Shehan said. "That's how I raised my kids, but these days I notice they eat out a lot, too. It's this cell-phone generation that's too busy to cook."

By Patrik Jonsson, The Christian Science Monitor