Groceries Are Eating Your Fun Money
The Real Numbers | Home Economics Journal
The average American household spent $120 a week on groceries in 2020. They spend $170 a week now. That is a fifty dollar a week increase, or about $2,600 a year, just on food at the grocery store. Nobody is using fifty extra dollars a week of food. The food is the same. The price is what changed.
Most households did not get a $2,600 raise
So the money came from somewhere else. The question this article is about is where. We had a hunch that money was leaving the entertainment budget. Fewer dinners out. The streaming service cancelled. We wanted to find out if that hunch was right, and if it was, where the money was actually going. Because if households are cutting fun, somebody is losing the sale, and somebody else might be picking it up.
We went through six sources to find out. We read research from FMI, the food industry trade group, where their VP Andrew Harig was direct about what is happening to family budgets. We read the U.S. Department of Agriculture's Economic Research Service for the long-run grocery price data. We read a YouGov survey from February that asked 1,340 American adults what they were planning to cut and spend more on this year. We read coverage from the Christian Science Monitor about where Americans say inflation hurts most. We pulled the 2025 results from Live Nation, which is the company that owns Ticketmaster and runs most of the big concert venues in America. And we pulled one-year stock returns for the six biggest companies that sit on either side of this question. Walmart, Costco, and Kroger on the grocery side. Disney, Netflix, and Live Nation on the entertainment side. We came in with three questions. How much money is actually moving out of the entertainment budget? Where is it going? And which companies are catching the dollars that move?
What We Actually Know
The grocery number is the easiest one to anchor. Andrew Harig at FMI told a USDA forum in February that the average American household now spends $170 a week on groceries, up from $120 in 2020. That is a forty-two percent increase in five years. Inflation alone does not explain it. Harig said directly that part of the increase is real inflation in food prices, but another part is consumers shifting money out of other categories of their household budget into the grocery line so they can keep eating at home. The categories he named were clothing and eating out.
The U.S. Department of Agriculture's Economic Research Service backs that up with the long-run numbers. Food at home prices were up 2.3 percent in 2025 and are forecast to rise another 3.1 percent in 2026. Restaurant prices are running faster, up 3.9 percent in February alone. Since February 2020, grocery prices have jumped twenty-nine percent on a cumulative basis. That is the compounding effect that makes a trip to the store feel different even when this month's increase is small.
YouGov surveyed 1,340 American adults in February about their 2026 budget plans. Among adults who think their finances will get worse this year, sixty-six percent plan to cut back on eating or drinking out. Among adults who think their finances will get better, twenty-one percent plan to spend more on holidays. That is the split. People who feel pressed are pulling money out of restaurants. People who feel comfortable are spending it on experiences. Almost no one is planning to spend more on streaming. Almost no one is planning to spend more on clothing.
The Christian Science Monitor reported on May third that more than half of Americans say everyday life is less affordable, and most of them point to the grocery store, not the gas pump, as where they feel the squeeze most. That is what Harig and the YouGov data describe in different ways. The grocery line is now the single biggest source of perceived inflation pressure in most American households.
What Is Really Going On
Look at the chart above. It shows the one-year stock return for six big companies. Three of them sell groceries. Three of them sell entertainment. Walmart is up thirty-three percent. Kroger is up eighteen percent. Costco is up about fourteen percent. That is the grocery side. On the entertainment side, Live Nation is up nineteen percent. Disney is up eighteen percent, but underperformed the S&P 500. Netflix is down nineteen percent.
So far this matches the simple version of the story. Money is leaving entertainment, and the grocery stores are catching it. But the entertainment side has a split inside it, and that split is what makes the article interesting.
Live Nation, which is the concert and ticketing company, just had a record year. Revenue of $25.2 billion in 2025, up nine percent. A hundred and fifty-nine million people went to a Live Nation concert in 2025, up by eight million. Ticket sales for 2026 are already pacing up by double digits. Bruno Mars sold 2.1 million tickets in a single day in January, the largest single-day sales in Live Nation history. Harry Styles got 11.5 million pre-sale registrations. BTS sold out a forty-one date stadium tour. Concerts are not hurting. Concerts are setting records.
Netflix is the opposite story. The stock peaked at $134 in June and trades around $92 today. Disney recovered some ground over the year but still trailed the S&P 500. Both companies own giant entertainment businesses, and both delivered worse returns than the average S&P 500 stock. The split is real. Live entertainment is winning. Streaming is losing.
That gives us a clearer answer to the original question. The fifty extra dollars a week that used to go to entertainment did not all go away. Some of it stayed in entertainment. It just went to a different kind of entertainment. The cheap monthly subscription that disappears from your bank account on the same day every month is the thing people are cancelling. The expensive event that you remember for the rest of your life is the thing people are still buying. Live Nation's CEO Michael Rapino called this the experience economy in his shareholder letter. The math says he is right.
The grocery side is more uniform. All three big grocers are up. But the breakdown matters. Walmart's biggest growth driver is not groceries. It is the advertising business they sell on top of their grocery and retail platform, called Walmart Connect, which grew forty-one percent last year. Costco's biggest growth driver is not what they sell. It is the membership fee, which grew almost fourteen percent and produced $1.35 billion of nearly pure profit in just one quarter. Kroger is the most direct play on groceries themselves, and Kroger had a slower year than the others. So the grocery store winners are not just selling more food. They are also building businesses on top of the food that have nothing to do with food.
What the Sources Say Together
The most useful framing came from Harig at FMI, because his organization represents the grocery industry and his finding is honest about where the extra money is coming from. He said consumers shifted discretionary spending from clothing and eating out into the grocery line so they could continue feeding their families. That is the whole story in one sentence. The grocery line did not get bigger because Americans are eating more food. It got bigger because Americans moved money from other places into food.
The USDA data fills in the picture. Americans now spend an average of 10.4 percent of their disposable personal income on food. About half of that goes to food at home and half to food away from home. The percentage of income spent on food has barely moved in two years, even as both grocery prices and restaurant prices kept climbing. That means the dollar amount went up but the share of income did not. Households held the share by giving up other things to pay for it.
Live Nation hosted 159 million fans in 2025. That is more than the entire population of Russia. The company invested fifteen billion dollars in artists and shows last year. Ticket sales for 2026 concerts are already pacing up double digits. The same households that are cancelling Netflix and skipping the chain restaurant are paying $135 on average for the top tour tickets. Cheap recurring entertainment is dying. Expensive memorable entertainment is booming.
The streaming side of the picture is the one Wall Street is having the hardest time with. Netflix is down nineteen percent over the past year, with the price-to-earnings multiple compressing from a high of fifty-three back down to thirty. Disney trailed the S&P 500 even after recovering some ground. The Motley Fool's analysis from late April put it plainly. Investors are paying less for these companies because investors believe the growth story has slowed. The growth story has slowed because there is a limit to how many monthly subscriptions a household can carry, and the limit got lower when the grocery bill went up.
The grocery stock side is the strangest finding in the article. The three companies most directly tied to the rising grocery bill are not winning because of food. Walmart is winning because of advertising. Costco is winning because of membership fees. Kroger is the most exposed to actual food sales and Kroger had the worst year of the three. The companies that profit from rising grocery bills are not the ones selling groceries. They are the ones selling other things to people who shop for groceries.
What This Means
Here is the honest read. The fifty extra dollars a week that left other parts of the household budget mostly went into the grocery store, but only some of it stayed there as profit for the grocery companies. A bigger chunk of it went to the food companies and the manufacturers in the supply chain. The grocery stocks that won this year won because they built businesses on the side. Ads. Memberships. Other things that are not food.
The entertainment side split into two completely different stories. Streaming is becoming a commodity. The fight is over how many subscriptions a household will tolerate, and the answer is fewer than the streaming companies hoped. Live entertainment is becoming a luxury. The fight is over how much a fan will pay to be in the room when something happens, and the answer is more than the live entertainment companies expected. The casual middle of the entertainment spectrum, where the chain restaurant and the multiplex used to live, is the part that is hollowing out fastest.
For someone trying to make sense of their own household budget, the question this article raises is whether the shift you are making at home matches the shift the data describes. If you cancelled three streaming services this year and bought one expensive concert ticket, you are doing what the rest of the country is doing. If you cancelled the chain restaurant subscription and the gym, and you spent the difference on Costco runs and the kids' birthday party, you are also doing what the rest of the country is doing. The shift is real, and it is consistent across millions of households making the same trade.
What Each Source Did Well
FMI and Andrew Harig gave us the cleanest direct statement of the shift. Their finding that consumers are moving discretionary money from clothing and dining out into the grocery line is the clearest single-sentence description of what is happening. Their data comes from a rolling consumer survey that has been running for years, which means they can see the shift over time, not just at a snapshot.
The USDA Economic Research Service gave us the long-run anchor. The 29 percent cumulative grocery inflation since February 2020 is the number that tells you why the household budget feels different even when this month's increase is small. The forecast of another 3.1 percent in 2026 says the pressure is not done.
YouGov gave us the household-level evidence that the shift is intentional. People are not stumbling into cutting eating out. They are planning to cut it. Their February survey of 1,340 adults shows the split between households who feel squeezed and households who feel comfortable, and the cuts and increases sit in different places for each group.
Live Nation's annual results gave us the strongest single piece of evidence that not all entertainment is losing. The 159 million fans, the $25.2 billion in revenue, the record single-day ticket sales for Bruno Mars, all of it points the same direction. Households are choosing what to buy with their entertainment dollars more deliberately, and live experiences are winning that choice.
The streaming coverage from Motley Fool and TIKR did the work of showing the cost of being on the wrong side of the shift. Netflix is down nineteen percent over the past twelve months. Disney trailed the S&P 500. Both are not bad companies. They had a bad year because the casual entertainment subscription is the easiest line to cancel when the grocery bill goes up. The data they reported is the cleanest evidence of the squeeze coming through to the publicly traded entertainment companies.
The Christian Science Monitor reporting confirmed what the household data implies. Americans now point to the grocery checkout, not the gas pump, as the single most painful spot in the family budget. That is a shift in itself. The energy spike that defined the inflation conversation two years ago has been replaced by the food spike. The article describing what households are doing about it is the article we just told.
Sources
This article is part of the Home Economics Journal published by Breadcoins. It does not constitute investment advice.