Food is one of the most visible items in the average American’s budget. We eat daily and shop for food often. Groceries are also one of the most flexible budget items: you can’t change your rent or car payments, but you can change your grocery shopping patterns. Let’s take a closer look at average grocery costs and how they vary by location, income, and family size.

Food is usually defined as food that is prepared and consumed in the home. Money spent on food or ordering does not qualify. Consumable items often purchased in grocery stores, such as cleaning products and personal hygiene items, can also be classified as food.

Average monthly expenditure on food

Here’s a breakdown of the average American monthly spending pattern. Food is the third largest expensebut it is not divided into food and food prepared outside the home.

Food expenses include groceries and meals away from home, which is any meal you pay someone else to prepare for you. Americans spent on average $779 per month on food in 2022 a $9,343 for the entire year. Here’s how it breaks down.

How much does the average American spend on groceries each month?

Only when considering expenditure on foodthe average American spends approx $475 per month and total $5,703 for the entire year.

💳 More information: Maximize your savings on everyday essentials with our guide best credit cards for groceries.

How much do Americans have to spend on groceries?

Are Americans Spending More Than They Need on Food?

The US Department of Agriculture has created four food plans that Americans can follow; economy plan, low cost plan, medium cost plan and liberal plan(1).

These plans take into account a person’s age and gender to calculate the average cost of a meal. The plans are based on the assumption that all meals are cooked at home and meet nutritional recommendations. The figures are regularly updated to take inflation into account.

Here are the average food costs listed in the December 2023 USDA Food Plan(2.3):

Tea average monthly bill for a family of two adults and one five-year-old child in the US according to the official USDA Moderate Food Plan is 898 dollars. This is significantly more than the average household spending on food of $779. The difference is because many American households do not have children, which lowers average spending.

US Census data show that the average family household size was 3.2 people, while the average non-family household size was only 1.25 people. Average food expenditure is not broken down into family and non-family households, but family households will have significantly higher food expenditure than non-family households.

People with higher incomes spend more on food

Income has a major impact on food spending. Unsurprisingly, a higher income offers a lot of options. People with higher incomes can afford to pay more for organic products, imported foods and gourmet items(4).

Low income also affects overall selection. According to a study 2019households with lower incomes buy fewer healthy foods such as vegetables and dairy products than households with higher incomes. The study noted that “households with lower incomes had lower scores (poorer nutrition quality) compared to households with higher incomes.”

Low-income households also pay more to buy food. Consumers can save significant amounts bulk purchase of non-perishable items, but a tighter budget puts money-saving bulk purchases out of reach. Low-income households online store less often and have less access to large grocery stores with competitive prices.

How have grocery costs changed over the years?

Average food spending for both home-prepared and take-out meals has been steadily increasing for many years, with a particularly sharp jump during the period of high inflation in 2022(4).

Food prices increased sharply During inflation increase in 2022. Food price inflation moderated somewhat in 2023 but was still well above historical averages.

Semiannual inflation for major US food categories, 2022 and 2023

Egg and poultry prices have been hit by the highly pathogenic avian influenza (HPAI) outbreak. Egg prices saw the largest price increase (32.2%) between 2021 and 2022 of any category tracked by the USDA. Beef and veal prices rose the least (5.3%) between 2021 and 2022 and generally declined from peak prices in November 2021.

The USDA predicts that food prices at home will decrease by 0.6% in 2024, while food prices outside the home are forecast to increase by 4.9%.(5).

Average food costs by state

Average food costs vary widely from state to state. Hawaii and Alaska usually seen the highest costsbecause many goods have to be transported over long distances(6).

Conclusion

Income is the main factor affecting household food expenditure. Higher income allows households to allocate more money to food and other expenses. High-income households may have the flexibility to choose premium and organic products, contributing to a higher overall grocery bill.

Households with lower incomes often struggle budget constraints, leading them to make cost-based decisions. Dietary choices, cultural preferences and lifestyles influence the types of food people buy.

Household expenditure on food is a complex outcome influenced by a combination of factors, including income, demographic characteristics, location, preferences, economic conditions and external events. Understanding these factors helps policymakers, businesses, and individuals make informed decisions about budgeting, resource allocation, and responding to dynamic market conditions.