How do restaurant’s establish their menu prices?
How does a restaurant, such as Red Robin or Olive Garden establish menu prices? At what markup on average do they mark up meals? Also, what vendors do restaurant chains such as these contact for food offerings? I am attempting to do a school project and don’t know how to find this information or some general information on restaurant’s and their prices.
Thanks
Oh, a LOT of factors
1) What are my competitors charging?
2) What are my costs? (material, labor, shrinkage, spoilage, etc.)
3) What are my desired profit margins?
4) Portion size?
5) What consists of a typical meal? (Can we make up for low profit here with higher profit on something else, like dessert, drinks, etc.?)
In general, restaurants mark up their food beyond material prices by at least 500% to account for labor and overhead. I think Chef Anthony Boudin (sp?) has some books that may reveal something on this subject.
probably by how the economy is doing or my other guess would be how the other restaurants around them are pricing their food.
References :
They want a specific return, say 25%.
Then they compute all the costs in that meal and then add the desired profit margin.
Gordon Ramsay has said 1/4 of a meal is food cost, 1/4 labor, 1/4 overhead and 1/4 profit
References :
Oh, a LOT of factors
1) What are my competitors charging?
2) What are my costs? (material, labor, shrinkage, spoilage, etc.)
3) What are my desired profit margins?
4) Portion size?
5) What consists of a typical meal? (Can we make up for low profit here with higher profit on something else, like dessert, drinks, etc.?)
In general, restaurants mark up their food beyond material prices by at least 500% to account for labor and overhead. I think Chef Anthony Boudin (sp?) has some books that may reveal something on this subject.
References :