A few weeks ago, I read an article from a local newspaper deconstructing the markups at restaurants. One can easily guess that drinks and booze are by far the largest profit makers (per $) for the restaurants. In general, the restaurant does not want the cost of the spirit per each dollar it sells to be more than 22 cents. The markup is eye-popping:
wine by the glass: up to 5 times
tea: up to 10 times
fountain soda: up to 20 times
Some food also commands outsized markups:
eggs: 5 times
pizza: up to 8 times
some pastas: 6 to 10 times
However what is interesting is that restaurants actually break even or lose money on some items:
organic vegetarian pasta: break even
rib-eye steak: break even or lose
dungeness crab: lose
oysters: (each 1$ oysters, restaurant loses 50 cents)
(Source: SF Chronicle)
Surely, the markups have to pay for the labour and energy costs, as well as liquor license, insurance, etc. Though I rarely eat steaks/red meat, but if I do, I will definitely eat it at a restaurant - my guilt is lessened as my purse is better taken care of.
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