This is a pretty classic article. I recall reading this many years ago, long before I got into the food game. Although I find some advice to be more applicable than others when it comes to my dining/eating habits, all the tips are insightful and helpful to everyone. If you haven’t come across this article before, I highly suggest you take a read as it may change the way you dine out forever .
1. “It’s more about the sizzle than the steak.”
Business is good for the restaurant industry. Americans now spend roughly half their food budget dining out, and restaurants expect revenue of more than $537 billion in 2007. That’s a 67% increase since 1997.
But it’s not just our collective avoidance of the kitchen that’s pumping profits: Restaurants work every angle these days, using marketing psychology to get you to spend more.
At legendary Aureole Las Vegas, spandex-clad “wine angels” retrieve bottles from a 42-foot-tall spirits tower. The thinking behind the spectacle: “Anything that gets patrons’ attention will get them to spend,” says restaurant designer Mark Stech-Novak.
Fast-food outlets use a high-stimulus environment to maximize the source of their profit: “It encourages faster turnover,” says Stephani Robson, a senior lecturer at the Cornell School of Hotel Administration. “Specifically, the use of bright light, bright colors, upbeat music and seating that does not encourage lolling.”
Even menus are rigged. “We list the item that makes the most profit first so it catches your eye,” says restaurant consultant Linda Lipsky, “and bury the highest-cost item in the middle.”
2. “Eating here could make you sick.”
The 2006 E. coli outbreak that started at a New Jersey Taco Bell and sickened more than 60 people was traced to green onions. But food-borne illness isn’t the only cause for concern: In a separate December incident, 373 people in Indianapolis got sick after eating at an Olive Garden where three employees tested positive for the highly contagious norovirus.
“You don’t call out (sick) unless you’re on your deathbed,” says freelance chef Leah Grossman. Indeed, according to a recent study, 58% of salaried New York City restaurant workers reported going to work when sick; the number is even higher for those without benefits.
“A lot of poor, transient people work in restaurants,” says Peter Francis, a co-author of industry exposé “How to Burn Down the House.” “They’re not giving up the $100 they’d make in a shift because they’re sick.”
How can you protect yourself? Check inspection results, which are often posted online by local departments of public health. Or just visit the restroom; it “tells you everything you need to know about a restaurant,” Francis says.
3. “Our markups are ridiculous.”
It’s no secret that restaurants enjoy huge markups on certain items: Coffee, tea and sodas, for example, typically cost restaurants 15 to 20 cents per serving, and pasta, which costs pennies, can be dressed up with more expensive fare and sold for $25 a dish or more. At a fine-dining restaurant, the average cost of food is 38% to 42% of the menu price, says Kevin Moll, the CEO and president of National Food Service Advisors. In other words, most restaurants are making roughly 60% on anything they serve.
It’s not all gravy though. Restaurants keep only 4 cents of every dollar spent by a customer, says Hudson Riehle, the vice president of research and information services at the National Restaurant Association. The remainder of the money, he says, is divided among food and beverage purchases, payroll, occupancy and other overhead costs.
Given the slim profit margin, many restaurants rely on savvy pricing to create the illusion of value. Putting a chicken dish on the menu for $21 will make a $15 pasta dish, where the restaurant is making a big profit, seem like a bargain, says Gregg Rapp, the owner of consulting firm MenuTechnologies.net. Read the rest of this entry »
