Have you ever wondered why one restaurant offers their food at a certain range while another has different rates? Here is a rundown of some of the most influential factors when determining restaurant menu prices:
First and foremost, we have to check the type of place that we are talking about. There is obviously a world of difference between a fast food chain and a Michelin-ranked restaurant. They have their own business models. One is able to make a profit by serving a large number of people despite selling items at relatively low prices. The store design is rather basic with the focus being on efficiency to serve as many as possible. On the other hand, classy restaurants serve a much smaller number of people who are willing to pay a premium just to experience fine creations by renowned chefs.
Among restaurants of the same type, variations can still occur because they have different sources of ingredients. Some might be importing their beef or chicken from the cheapest sources to lower their expenses and get a bigger profit margin. Others might be using local sources that are known for their sustainable farming methods to help the local economy and ensure the safety of their customers. Some restaurants use extenders in their meats to make their food appear bigger with the fillers. Others are adamant about using 100% pure meat in their patties. It’s a matter of quality vs quantity.
You could have the same restaurant selling at different prices in two different locations. This is clearly the case with most multinational corporations as they have to adapt to the local conditions. In one country, there may be lots of cheap and accessible sources of seafood. In other, these may be scarce because it is in a land-locked region so everything has to be imported. Other factors include operating expenses such as the utilities, fuel, labor costs, rental fees, and so on. Everything will affect the bottom line and so things can fluctuate depending on the current conditions.
Each business does not exist in a vacuum. It has to compete with others around it. This takes a toll on pricing. Despite the pressure to increase rates due to mounting expenses, doing so might negatively impact the restaurant as patrons may not be happy with the change. They can always leave and transfer to a nearby place if they get frustrated by the prices on the menu. Or perhaps they will dine but never return after they receive their bill. In order to avoid this, managers have to find ways to increase business efficiency and reduce operating costs to offset expenses.
A lot of restaurants add value to the dining experience by providing different services. For instance, you might see more personalized service when planning a meal for your party. A full course may be designed just for you, taking to account your preferences and past comments about your meals. Others might have a live band, pay-per-view sports, gaming rooms, and other fun activities for guests.