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Is Eating Out Cheaper than Cooking at Home?

Updated on February 24, 2012
Eating out can be fun- but is it really cheaper than eating in?
Eating out can be fun- but is it really cheaper than eating in? | Source

Groceries are getting more expensive

If you've been tracking the cost of food at most grocery stores, you already know that it has increased substantially in the last several years. Indeed, the Economic Reserve Service (ERS) of the USDA reports that the food-at-home consumer price index (CPI) increased 4.8% in 2011 (1). Fortunately, the past year was not as bad as 2008, when the food-at-home CPI increased a whopping 6.4%.

The ERS also compared how the CPI of restaurant-based food, or food-away-from-home, compared with the CPI of food-at-home. Interestingly, for the year 2011, the food-away-from-home CPI showed an increase of 1.9% (2). This is in comparison to the food-at-home CPI increasing 4.8%. Furthermore, for 2012, the predicted CPI increase of food-away-from-home is to be 2-3%, while food-at-home is to be 2.5-3.5%.

This sea bass item cost $29.99 at the Claim Jumper restaurant. Would it have cost less to make it at home?
This sea bass item cost $29.99 at the Claim Jumper restaurant. Would it have cost less to make it at home? | Source

More people are choosing to eat out

Given that even government statistics are stating that it is more cost-effective to simply eat out, many folks have started doing just that: According to MSN Money’s comparative food analysis of the same meals purchased either at a chain restaurant or made from scratch at home, the price winners were almost always the restaurants (3). For example, consider the following meals that were either purchased at a restaurant or prepared at home:

Outback Steakhouse 10 ounce New York Strip dinner: $16.99 (comes with a cup of soup or a salad and a side item)

Grocery store: New York strip: $6.87 (at $10.99/lb), Salad/soup: $3.99 (for a bag of salad or gourmet canned/frozen soup), Side item: $2.29 (for bag of frozen vegetables). Optional items: Salad dressing: $3, Butter: $3. Total cost: $13.15 for base ingredients, $19.15 for base plus optional ingredients.

Price winner: Depends on whether or not optional items are purchased. Personally, I have a hard time swallowing dry salad. I also need some butter on my veggies.

Red Lobster Ultimate Feast dinner: $24.99 (comes with 4 ounce split Maine lobster tail, 1/2 lb. Snow Crab legs, shrimp scampi and 4-5 breaded/fried shrimp, plus biscuits, salad, and one side item)

Grocery store: 4 ounce Maine lobster tail: $8. 1/2 lb Snow Crab legs: $6. 1/2 lb lb shrimp to make scampi and fried shrimp: $6. Butter for scampi: $3. Breading for shrimp: $1. Biscuits: $2. Salad: $3.99 (for a bag of salad). Side item: $2.49 (frozen fries). Oil for deep frying: $2. Optional item: Salad dressing: $3. Total cost: $34.48 for base ingredients, $37.48 for base plus optional ingredients.

Price winner: Red Lobster by a long shot.

Olive Garden 3 Course Italian Dinner: $12.95 (includes salad or soup, pasta entree with sauce and meat or portobello mushroom topping, mousse-type dessert, and bread sticks)

Grocery store: Salad/soup: $3.99 (for bag of salad or gourmet canned/frozen soup). Pasta: $1.99/box. Pasta sauce: $2.99/jar. 1/2 lb. chicken/sausage/ground beef: $2.50, or 1/2 lb. shrimp: $6, or 1/2 lb. portobello mushrooms: $1.50. Mousse mix plus milk: $4. Bread sticks: $2. Optional ingredient: Salad dressing: $3. Total cost: $17.47/$20.97/$16.47 for base ingredients and respective meat or mushroom, $20.47/$23.97/$19.47 for base plus optional ingredient.

Price winner: Olive Garden

This shrimp dish with rice and vegetables at Claim Jumper ran $15.99. Would it have cost more to make at home?
This shrimp dish with rice and vegetables at Claim Jumper ran $15.99. Would it have cost more to make at home? | Source

My take on eating out versus cooking at home

I used to be a part of the “eat out” crowd and I loved it. I could hit a restaurant after work during its happy hour, fill up on appetizers and drinks for $5-$10, and sometimes even walk away with leftovers for the next day. I kept track of which restaurants offered which happy hour deals for every day of the week. The only day I ate at home was Saturday, when almost no restaurants or pubs offered any kind of food/drink deal.

However, several factors changed both my work, health, and life situations. This presented several detractions to my constantly eating out, including the following:

Lack of time

Once I no longer worked almost next-door to area restaurants and pubs, I had to drive about 20 minutes to get to them. Parking began to cost me more money than I saved by eating out. Also, once I started working from home, it became more time-efficient for me to just grab something from the kitchen rather than spend an hour or two at a restaurant.

Food additives

I started developing migraines from eating food laced with MSG. Since restaurants preferentially add MSG to many of their items, I became leary of eating out. I also noticed how many restaurants over-salted and over-sugared their food, leading me to drink buckets of water after I ate out. This would inevitably lead to a huge water weight gain, not to mention a spike in my blood pressure. Because I could actually control what I added to my food when I prepared it at home, dining in became my preferred choice over time.

Hidden costs

Tipping and taxes are two hidden restaurant costs that are not accounted for in the above MSN Money and other articles. Tipping nowadays runs 20% of the bill, and taxes can run anywhere from 5-10% or beyond. Thus, a standard $10 restaurant meal actually costs more than $10; figuring in tips and taxes, you pay around $12.50-$13.

What you can do about the high price of groceries

It's no secret that groceries can be expensive. Experts have already told us countless times that you shouldn't shop while you're hungry, for example. But there is more to grocery shopping than just getting what you came for. In fact, if you are to save money on groceries, you need to change your shopping strategy. Here are some things I've learned along the way as I've returned to making my meals at home instead of always going out to eat:

Buy grocery items in bulk, in season, and on sale. The one thing that made almost every grocery-bought meal shown above a price loser when compared to its comparable restaurant meal was the fact that all the grocery store ingredients were bought at full price. Meanwhile, the restaurant meal ingredients were almost certainly purchased in bulk, in season, and on sale. This is a big reason why the restaurant food was almost always cheaper.

Sales cycle every 12 weeks. If you find a sale on salad dressing, for example, try to stock up on this item for at least 12 weeks. This is because most grocery stores cycle their sale items every 12 weeks. Thus, it is likely that you won't find a good sales price on your preferred grocery item for the next 3 months.

Match coupons with store sales. I talk more about this strategy in my articles on "How to Do Super Couponing (or Extreme Couponing)". In essence, by clipping out and then using your coupons with sale items at the grocery store, you end up saving 30% or more on your purchases. In some cases, you might even get the sale item for free!

Adjust your meal expectations. Let grocery store sales and what you already have available at home dictate what you will make for breakfast, lunch or dinner. Don't enter the grocery store with the idea that you MUST make ribeye or lasagna or stuffed chicken this very night and all the ingredients for the entire meal must be purchased right now. Instead, look at what's on sale first. Also, if you combine some of your grocery purchases with what's already available at home (i.e., leftovers), you'll usually end up saving not only money but time.

Select different stores for different items. If your local grocery store has a great deal running on meat, then go there strictly to buy its meat. If another grocery store has cheap produce, buy your produce there. Most grocery stores will advertise their sale items, known as "loss leaders", in the hopes that they will draw you in and lead you to buy other items as well. Don't fall for that trap! Instead, get the best deals possible on all your groceries, even if it takes a little more time.

Alright, who ordered 16 Don Julio margaritas?

Another downside to eating out at restaurants.
Another downside to eating out at restaurants. | Source


Overall, you can eat cheaply either by going out or dining in. If you're single and don't have much time to shop or cook, then a restaurant meal will save you both time and money, and probably even provide you with enough leftover food for your next meal. However, if you have children and don't mind preparing your own meals, you can also save a lot of money by eating in. Taking advantage of grocery store sales and manufacturer coupons also helps you buy your groceries on the cheap.


1. Food CPI and Expenditures: Analysis and Forecasts of the CPI for Food

2. Food CPI and Expenditures: CPI for Food Forecasts

3. Is eating out cheaper than cooking?


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    • ChristyWrites profile image

      Christy Birmingham 

      6 years ago from British Columbia, Canada

      Hally, this is a great hub. You offer good suggestions for ways to shop smart at the grocery store. I like tips to save money and doing so with the food we buy is a great concept! I vote up.

    • charmike4 profile image

      Michael Kromwyk 

      6 years ago from Adelaide, South Australia

      When I visited the US I was amazed at how cheap it was to eat out or to take out. In fact I fed the whole family a mexican takeaway for about $10, which is amazing. I find now that in Australia the prices have risen and a family of 5 dinner at a cheap restaurant costs about $100-$120 (including non-alcoholic & wine add an extra $50 minimum) whereas we can eat at home for around $20-25 most nights with premium produce including drinks.

      The other night we had friends over and the Porterhouse Steaks for 4 cost $35, the salads & other food cost about $40 and the bottle of wine was $25. So for around $100 I fed 4 adults and 3 children...the same experience in a restaurant would cost about $300.

    • eatforcheaper profile image


      6 years ago from London

      Some great points raised here. I tend to go through stages of eating out all the time and then suddenly wanting to cook a lot! I agree, food prices have increased a lot even here in the UK. Hope you find my articles interesting too :)

    • profile image

      Brittany Walker 

      6 years ago

      Thanks for the great article! Good info and I'm happy to find the apps for my phone. Only thing I noticed is that most people keep certian items on hand like butter and salad dressing so they really aren't always spending that much.


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