In this analysis we examine the average annual expenditure by consumers on food away from home by the consumers income quintile. The income earned by consumers is broken up into 5 separate brackets – a quintile – as such depending on the amount of earnings, a consumer can be in either the lowest 20%, Second 20% Income, Third 20% of Income, Fourth 20% of Income or the Highest 20% of Income.
As can be expected the income quintile of a consumer will have direct impact on their ability to spend on an item like food away from home. Our analysis that covers a decade shows a direct relationship between the income quintile and the absolute dollar amount spent by the consumer on food away from home – thus in 1999 folks in the lowest 20% quintile spent on average $882 on food away from home annually where those in the highest 20% quintile spent $4,295 on average annually on food away from home.
What is interesting to note in this analysis however is the fact that over the decade there has been approximately 20% increase in the absolute dollars spent on food away from home for all quintiles except the third 20% quintile which only shows a growth of 8.1%. Thus in 1997, folks in the third quintile spent on average $1,968 per month on food away from home, and in 2007 they spent only $2,127. If the vast majority of folks in the Third income quintile can be categorized as the middle class – then it would indicate that the middle class is the one that is not spending as much as it used to on food away from home.
This certainly has implications for a small business like a A Taste of Tuscany – if we were to target the middle class or the third income quintile as the folks who would be our main customers, we would have to ensure that our prices and value offered by our meals would be within the range of affordability for this segment of the population. Being that we are tageting the upscale and well heeled clientele, we won't have to worry too much about this national trend for now.
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