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Why groceries are so expensive in the United States

If you're planning a move to the U.S. and running the numbers, grocery costs should be a big factor in your budget. To give you a better idea of what you'll be spending compared grocery costs of U.S. cities to other cities around the world.

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Maggie McGrath
Content Consultant and PhD Candidate at the Oxford Internet Institute

If you're planning a move to the U.S. and running the numbers, grocery costs should be a big factor in your budget. To give you a better idea of what you'll be spending here vs. where you are now, we've compared grocery costs in two sizes of U.S. cities to other cities around the world.

Average food costs in New York City

According to Numbeo, a user populated cost of living index, the average food costs in New York City are $472 per month. In London the average is $318. In Frankfurt, Germany the average is around $224. In Mumbai, groceries cost approximately $82. Of course, salaries and other expenses factor heavily into a comprehensive cost of living comparison. But since we are focusing on groceries, it is important to note that the average monthly cost of groceries in New York City is considerably higher than London, continental Europe or Southeast Asia.

Keep in mind that this figure represents an average: if you live in Manhattan instead of Brooklyn, costs are likely to be higher. A half-gallon of milk in New York City can range from $1.39 (non-organic) to $7.99 (organic).

Average food costs in Columbus, Ohio

The metropolitan area of Columbus, Ohio is approximately 2 million, making it an average medium-sized American city. Examining food costs in Columbus provides a valuable comparison to a coastal metropolitan area. Groceries in Columbus, Ohio come to around $316 per month, a surprisingly similar figure to grocery costs in London. Overall Columbus is considered an affordable city, unlike New York City, which regularly ranks among the most expensive cities in the world.

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Why are groceries so expensive in the U.S.?

Food costs in big American cities often reflect costly commercial leases. In Manhattan, the logistics of delivering food are complicated and wages of grocery store employees are higher than average. However, most of these factors apply to large urban centers in Europe as well. So why do groceries cost more in large American metropolises than in the EU?

Farm subsidies in the EU play a large role in stabilizing food costs. The Common Agricultural Policy, or CAP, is 37% of the EU budget. While not without its critics, the CAP has arguably made quality, local food more affordable. The UK and Brexit cast the CAP subsidies into an interesting light. Currently, the plan is to withdraw from the CAP subsidies in 2028! The U.S. does have farm subsidies, but the budget allocated to farm subsidies is less than 1% of the total budget, and it goes primarily to big agriculture and not small, independent farms.

Tips for budgeting in the U.S. 

In places like New York, access to low-cost grocers is scant and the busy pace and dearth of pantry space may preclude one from taking up extreme couponing. However, there are still options like buying grains and seeds in bulk, and shopping at local farmers markets that can offset the high cost of food.

In conclusion, when considering living expenses in the U.S., if you’re moving from Europe or Asia chances are you’ll spend more of your salary on groceries than you’re accustomed to. There’s plenty of ways to mitigate the increase, it just takes time and bargain hunting.

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