Author Topic: Higher food cost to be passed on...  (Read 894 times)

Offline KoPP

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Higher food cost to be passed on...
« on: December 22, 2010, 08:44:22 AM »
http://blogs.ajc.com/food-and-more/2010/12/20/restaurants-face-bottom-line-dilemma-eat-rising-costs-or-raise-prices/

What do y'all think? I understand the part about the base cost of materials rising - no problem. I understand profit margins - gotta make a living.

But I'm not sure how the consumer is going to understand everything that is going into the cost of a meal, and how a restaurant explains to the consumer that it's more important to them to source imported tomatoes vs. a can of Hunts. Few consumers know (or really care) about those types of line items. So - how does a restaurant explain to Joe Public the costs of a dish?

Offline The_Scientist

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Re: Higher food cost to be passed on...
« Reply #1 on: December 22, 2010, 09:11:42 AM »
You can explain to John Q. all you want about why his usual Friday night pasta dish at Olive Garden is 50 cents higher this week than last, but chances are he'll react the way he's reacted for the last two years: start going to Olive Garden less often. 

Restaurants have been running scared over this and not raising prices on menu items to keep customers happy.  Chains are better able to absorb the hit because they buy in bulk and can squeeze their suppliers.  Not so with independents who want to distinguish themselves by using quality ingredients.  Olive Garden isn't using San Marzano tomatoes, and their customers wouldn't know the difference anyway, but chef-owned places are truly hurt by this.

I'm price sensitive as well - paying $50 a person is splurging for me - but I also know where I can get great food for not so much.  There is a point where the dining experience is not worth the price, but if a great place has to raise their entrees a few dollars to keep the quality up, I'm inclined to pay up.
"Crayons taste like purple" - Tardy the Turtle

 

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