The FiscalTimes did an interesting comparison of eating out vs eating in. Their conclusion was that eating at some of the most well-known restaurant chains (Outback, Red Lobster, Olive Garden, etc.) is comparable to preparing the same sort of meal at home, and in fact in many cases is cheaper.

Of course their analysis is horribly unscientific and ignores some critical aspects of the comparison, but there are some things worth looking at in the study.

First I’ll point out the things they ignored which make their comparison not very realistic:

1. Taxes. Yep, they totally ignored the fact that your $20 entree at a typical restaurant actually costs you $21 or more.
2. Tipping. Throw a tyipical tip into the mix and your $20 entree is now pushing $25.
3. Drinks. Of course most folks who have spent any time in the restaurant business know that restaurants make most of their profit on drinks. And not just their alcoholic drinks, but that’s where most of their profit comes from. But $2.99 for a soda is not unusual in these places, which compares to probably $.50 or less if you buy soda from a grocery store. Of course you CAN drink water at the restaurant (but some charge for water too) but nobody actually does that. So that $20 meal is now pushing $28.
4. Gas. Let’s say you have to drive ten miles to eat at the restaurant (of course we have to drive more like 60…). In a fairly decent mileage car, that’s another $1.25 or so. Now your $20 meal is over $29.

OK, but still, is there anything here worth considering from a restaurant meal perspective?

Yeah, I think so. In general eating at home is more economical because of the ability to purchase large amounts of items and cook portions of it. Most responsible grocery shoppers buy large amounts of staple items such as potatoes, vegetables, hamburger, chicken breasts, salads, etc… In the comparison cited above they purchased food for the specific purpose of making a meal, so they didn’t “make” a salad, they bought a “bag-o-salad” instead, and did not consider the potential for the bag to have been enough for two meals. A typical head of lettuce, bag of carrots, couple of tomatoes, etc. can make enough salad for a week of home cooked meals.


Let’s say you want something unusual that doesn’t really fit with your typical purchases. Lobster maybe. Or shrimp. Or salmon… In those cases you end up purchasing single-meal amounts of such items because you’re not planning on eating salmon all week, and it’s a bit of a pain to try to keep salmon in the freezer which is already full of hamburger and chicken breasts…

In those cases eating out actually might be as cheap or cheaper than making the meal at home, especially if you are out of the house anyway for some reason and you aren’t making a special trip just to eat.

Of course if your home menu is made up primarily of toast, macaroni & cheese, Ramen noodles or peanut butter, then this sort of comparison is sort of silly… In that case it’s cheaper to eat out if you just hop from one Sam’s club or Costco or similar store and just scarf up their samples…