When I was living in London, my friend Suzy, a graphic designer, was looking at jobs in her field in New York. She kept remarking on how much higher salaries were in New York relative to London. Having just moved from New York to London, I immediately thought of how much more expensive groceries are in New York, and that groceries, among other factors, would quickly eat up a pay raise. In addition to factors like high healthcare and housing costs, groceries make up a large percentage of monthly expenses. This is especially pronounced in America’s larger cities.
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.
Additionally, this is an average and includes neighborhoods of New York that are further from the city center and far more affordable, but if you were a young professional living in Manhattan or say North Brooklyn, costs would be considerably higher. A half-gallon of milk in New York City can range from $1.39 (non-organic) to $7.99 (organic). In other words, unless you plan to go to great lengths to find cheap groceries, consider the average to be on the low side.
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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 is definitely not. However, even in a heartland city groceries are still a large expenditure, and one to consider when planning a monthly budget.
Why are groceries so expensive in the US?
Food costs in big American cities must account for costly commercial leases. In Manhattan, the logistics of delivering food are complicated, and wages of grocery store employees are higher than average. And in general, there is more willingness to pay for premium groceries.
Surely the combination of these factors accounts for part of why food is so expensive in a place like New York City relative to Columbus. 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 US
The good news about grocery shopping in the United States is that Americans love a good coupon. In fact, Extreme Couponing is even a television show, where people tend to stockpile based on deals. The weekly circulars in the newspaper have been supplanted with apps like Ibotta, Snipsnap and ShopKick. Couponing can be time consuming, but a little organization can go a long way towards saving. Additionally, low-cost grocers like Aldi and Lidl are growing 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.