Having worked in the hospitality industry for ten years, I learned many different techniques to try and make more money for our restaurants. By understanding the many ways restaurants can manipulate you to spend more money on your dining experience, hopefully you can keep more of your hard earned money in your wallet and out of the greedy restauranteurs’ hands. Here are a few ways that restaurants make more money from your visit.
This is the number one source for sales at any restaurant, and countless hours are spent trying to make every item listed as profitable as possible. Typically each menu item is priced according to its cost. Restaurants want to attain a food cost percentage below 30 percent (ideally below 25 percent). However you won’t just see oddball pricing of $9.32 simply because it fits a formula. Customers do not perceive a difference between $9.32 and $9.99. By applying this pricing technique to dozens of menu items, this is an easy way for restaurants to gain a couple of points on their margins.
Restaurants also use boxing or shadowing techniques to highlight items, which typically increase the sales of that item by 20 – 30 percent. Also just using the words special or new tend to increase orders by up to 20 percent. So why would restaurants want to highlight these specific items? While sometimes it is the most popular item on the menu, most often these items have the lowest food cost or highest profit margins for the business, meaning not the best value for you.
In the hospitality industry, more focus is placed on training their people to become great sellers. The waiter, hostess, and bartender are just extensions of their sales staff. Upselling has become the industry standard, as side dishes, appetizers, desserts and drinks all help build higher average cheques.
Recommending that you pair complementary items together is another way to get more money out of your wallet. How often have you had a server ask you if you wanted to add mushrooms or prawns to your steak, or a specialty coffee with your dessert? Have you ever been offered bottled water or Perrier when you ask for water, or have been offered a bottle of wine or half-litre instead of the two glasses you asked for? A good server will take every opportunity to upsell an item to you.
Since buffets do not make a lot of money without consistently getting a high volume of people through the doors, this is probably your best value for money spent. Still, good restaurants find ways to make money even on buffets. First, they will make sure you have a glass of water. They will set out smaller plates than normal at the buffet line to play on some people’s fears of going back to eat multiple times. And they will start with a spread of low cost breads and salads to fill you up. Also, take a look at the entrée’s, as these could have been last night’s special that didn’t sell.
Another fun fact, check out the straw that the restaurant uses for your drinks. The non-stop refill pop that you ordered will have the skinniest straw possible to help slow you down, while the alcoholic beverage you ordered will come with a big fat straw to speed up your consumption.
By understanding the various techniques restaurants use to make money from you, hopefully you can avoid some of the manipulation and subtle mind tricks designed by this industry to squeeze an extra few bucks out of your wallet.