IN THE MOMENT: Give U.S. consumers the option of cutting back on food and drink to save money or spending as they usually do and the impulse purchase wins out.
If dining out is wrong, U.S. consumers don't want to be right—at least the ones who responded to the Pew Research Center's new study of their spending habits. Even when money gets short and their credit card balances climb into the stratosphere, restaurant meals aren't the first place consumers look to cut back.
Such were the findings of "We Try Hard. We Fall Short. Americans Assess Their Savings Habits," a telephone survey of a nationally representative sample of 2,000 adults conducted late in 2006. Its purpose was to shed light on the dichotomy between how Americans say they manage their money (77 percent claim they are the kind of person "who always looks for ways to save money") and their actual performance, which indicates they seldom find ways to save. The Pew researchers note that the personal savings rate in the U.S. "has fallen into negative territory for the first time in modern history," even though "as recently as the early 1980s, Americans had on average been saving more than 10 percent of the after-tax earnings."
The Pew researchers wondered why, in a nation of self-described savers where two-thirds of respondents say are always aware of how much money they are spending and 72 percent say they frequently worry about it, so much self-described splurging goes on. The three most frequent areas where respondents admitted they spend too much: food and dining out (25%); entertainment and recreation (17 percent); and shopping and personal items (15 percent). Only 14 percent of respondents said they didn't splurge on anything.
There's no mystery about how to stop splurging: just do it. If you're looking to save more money, as most respondents say they are, just cut back on the extras and you're on your way. But is that what people actually do? To find out, Pew asked them, "If you needed to cut back, which expense would you cut back on?"
Surprisingly, "food and dining out," the most-splurged-upon item, wasn't the top pick for belt-tightening. More consumers would give up "entertainment and recreation" (21 percent) than "food and dining out" (19 percent). This in a nation where 10 percent of respondents would cut back on "bills and utilities" (10 percent).
In demographic breakdowns, middle-agers are more likely to splurge on entertainment and recreation, while those under 30 splurge more frequently on shopping and personal items. The key finding: "All age groups are about equally likely to say they splurge on food and dining expenses," the report concludes.
Which is to say that Americans, regardless of demographic group, know they spend more than they should on food and dining out, but aren't going to give it up, even if it means they won't be saving enough for the future, or saving anything at all. If you can find a statistic that bodes better for the future of the restaurant industry than this one, we'd like to know about it.
The survey was conducted by the Washington DC-based Pew Research Center, which describes itself as a "nonpartisan fact tank" that provides information on the issues, attitudes and trends shaping America and the world.