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Sunday, August 16, 2015

How much do you spend on lunch ! Engel's law of family expenditure

Have you heard of - Ernst Engel, a German statistician and economist, and his  famouslaw !.....what sort of a person are you – how do you relish your lunch.  Eat alone enjoying your food, eat fast of whatever is provided by your company or spend time talking with your preferred friends !

For millions of people – lunch the highlight of their day, which otherwiseis  marred by monotony, irritation or stress.  People work to eat…… for many the lunch is the main food, though South Indians would prefer to have big sumptuous morning meal.  There are some studies though, which reveal that the cost of buying lunch is much higher – more than what they realise on items such as takeaway coffees and gourmet sandwiches. Natural that hotels, mess and eateries make brisk business.

One study states that Americans go out for lunch on average twice a week and spend $10 each time. That means they’re spending $936 annually.That amount is higher for men who outspend their female counterparts by 44%.  Down in India, there was a time when most people in Madras preferred bringing lunch box from home – a few of them, used to carry meals in tiffin-carriers.  In the crowded metropolis of  Mumbai inhabited by people of various cultures, people prefer having the meals made at home [with love and affection by their mothers and spouses] rather than eating outside at hotels….. getting back home for lunch is no option at all – going by the distance that people travel and the transport facilities available.. the trains are crowded and people do start rather early in the day for work…  they are well and truly served by  ‘dabbawalas’ -  a big, neat, well organized business. It would look pretty simple – somebody who runs the errand of picking your lunch box from home, delivers to you at your office, then picks the empty box delivering it back home. It for sure needs specilisation, commitment, highly organized skills to run this service.   They are more than a century old ~ and go about their business in style irrespective of Sun or shine braving the vagaries of weather, congested traffic, milling population and more.

In UK, some rush to work having just sandwiches for breakfast, the  stomach rumble cannot be ignored when it is time for lunch.  The opportunity, perhaps, to delve into a work bag to pull out a lovingly crafted risotto or the leftovers of last night's curry.The result, according to research reports BBC, is an annual lunch bill of £667 a year, or £830 for those working in London.This simple choice may actually be a fairly decent indicator of how well off people are feeling and of consumers' changing tastes, experts say.

Millions of lunches were served from 260,000 outlets, with the food sector generating £44.9bn of sales in the UK in 2013, according to analysts Horizons.Emma Read, director of marketing and business development, says that as people feel they have more money in their pockets, they will start to eat out more for lunch - although their spending will be far from extravagant."Outlets are riding the wave of coming out of recession, but consumers are also becoming more demanding," she says. Not many workers have time for a leisurely business lunch these days.  If this is a sign of economic recovery, then research by analysts, the NPD Group, highlights that this is not being felt across the country.

In the five years from the end of the recession in 2009, lunch visits to quick-service restaurants in London - including fast food outlets, bakeries and coffee shops - rose 17.1%.In the rest of Britain, it was up by only 4.4% over the same period.Typically, customers each spend £3.53 on these lunches in London, and £2.84 in the rest of Britain, NPD research suggests.Home-made packed lunches make far more financial sense, it is believed.  "With increasingly busy lifestyles, it is understandable to see why people are choosing convenience over economy," the analyst says.

It is very easy to slip into a routine of popping to the shop to grab a sandwich rather than planning your weekly or monthly shops to incorporate the components of a homemade lunch, then taking the time to prepare it.  It further indicates how frantic some working lives have become, NPD research suggests that more than half of Londoners (52%) took their takeaway lunch to their desks, compared with just over a third (38%) in the rest of Britain.

The adaptable nature of these restaurants also makes them attractive for growth in shopping centres, transport hubs, and even hospitals.Diners expect to be able to access wi-fi in the restaurant and they expect to order their lunch on a computer or smartphone while on the way from the office. They may also use discount schemes and online vouchers.

In Chennai, about a decade ago, hotels introduced ‘quick lunch’ and ‘quick tiffin’ bunching sometimes together, which are a great hit in chain-hotels like SaravanaBhavan,  Hot Chips, VasanthaBhavan, Sangeetha – as people prefer ordering them instead of tucking into alacarte items. There are still many, who would prefer the traditional ‘full meals’ – branded as South Indian, North Indian, Maharaja thalis !

Engel’s law in Economics, is a theory that as income rises, the proportion of income spent on food falls, even though the actual expenditure on food increases.  Engel's law doesn't imply that food spending remains unchanged as income increases: It suggests that consumers increase their expenditures for food products (in % terms) less than their increases in income. One application of this statistic is treating it as a reflection of the living standard of a country. As this proportion or "Engel coefficient" increases, the country is by nature poorer, conversely a low Engel coefficient indicates a higher standard of living.

With regards – S. Sampathkumar

14th Aug 2015.

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