Dining out surpasses grocery sales, here's why: Economist

Americans are spending more money dining out than in grocery stores for the first time since 1992, and the shift is all about demographics, according to FTN Financial chief economist Chris Low.

That's because the baby boomers are trying to save money by eating in.

"They undersaved for retirement. They're eating in more. But there are more millennials than there are boomers," he said in an interview with "Closing Bell."

Millennials "tend to be frugal but they also tend to live in cities and they like to eat out. They like to customize their food."

In addition, they use apps like GrubHub and Seamless to have meals delivered.

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The new data, released by the Commerce Department on Tuesday, shows food services and drinking places took in about $50.4 billion in March, compared with $50 billion spent in grocery stores. The shift was first reported by Bloomberg.

While millennials tend to eat fast food when they dine out, Low thinks there will be a growth in spending down the road.

However, "you're going to have to see some changes in the industry," he said, because millennials like customization, which Chipotle does well and McDonald's doesn't offer.

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As for the overall retail sector, Low thinks the news is a positive sign.

"This is one of the elements that makes me optimistic retail is going to come back in the second quarter," he said.