What's Happening?
The U.S. Department of Agriculture’s Economic Research Service (USDA ERS) Food Price Outlook, updated October 23, 2026, forecasts that prices for food away from home (restaurants and takeout) will rise by 3.5 percent in 2026. In contrast, prices for food at home (groceries)
are projected to increase by 2.3 percent. The overall 'all food' category is expected to see a 2.8 percent rise. These figures indicate that the cost of eating out is anticipated to climb faster than grocery prices. Historically, from 2006 to 2025, food away from home prices increased by an average of 3.5 percent annually, matching the 2026 forecast. Grocery prices, however, are forecast to rise slightly less than their historical average of 2.6 percent. This trend suggests a continued widening gap between the cost of restaurant meals and home-cooked food.
Why It's Important?
This forecast highlights a significant financial consideration for U.S. consumers, as the cost of dining out continues to outpace grocery expenses. For households, this means that discretionary spending on restaurant meals will likely become a larger portion of their budget, potentially leading to shifts in consumer behavior. Individuals and families may increasingly opt for home-cooked meals to manage their food budgets, impacting the restaurant industry's revenue and profitability. The consistent rise in food away from home prices over two decades, as noted by the USDA ERS, indicates a long-term economic trend that influences lifestyle choices and household financial planning. This disparity could also affect food service employment and investment in the restaurant sector, as businesses adapt to changing consumer demand and spending habits.
What's Next?
Consumers are likely to become more strategic about their dining choices, potentially treating eating out as a less frequent occasion rather than a default. This could involve checking menus online before visiting restaurants, sharing dishes, being mindful of extra costs like drinks and desserts, and exploring lunch options which are often cheaper than dinner. The ongoing trend might also encourage more home cooking, as grocery prices are rising at a slower rate. For the restaurant industry, this could necessitate adjustments in pricing strategies, menu offerings, and promotional activities to attract and retain customers. The USDA ERS forecast, while an estimate, provides a benchmark for both consumers and businesses to anticipate and plan for future food expenditure trends.
Beyond the Headlines
The sustained difference in price increases between food away from home and food at home could lead to broader societal shifts in food consumption patterns and culinary skills. As cooking at home becomes more economically attractive, there might be a resurgence in home cooking, potentially influencing demand for cooking classes, kitchen appliances, and recipe content. This trend also underscores the economic pressures on the restaurant industry, which faces rising operational costs that are often passed on to consumers. The 'sting' of gradual price increases, as described in the report, highlights how incremental changes can accumulate over time to significantly alter consumer perceptions of affordability and value, ultimately shaping the competitive landscape between grocery stores and food service establishments.
