Quality meat? Quality cooking? Staff and other overhead costs? Etc.
In: Economics
They make very little money on the steak because the beef they use is USDA prime, aged, which ends up costing at least $40 per pound. So how, you might ask, aren’t they all bankrupt? The answer is everything else they sell. That $22 side of mushrooms or asparagus has 50 cents of vegetables in it. The $175 bottle of wine costs them $30. The $22 mixed drink has $3 worth of booze in it. The $27 desert is a few pennies worth of sugar. So for a typical $300 tab for two about $120 of it, the steaks, is near cost whereas the other $180 is almost pure markup out of which they pay the lease on the building, the cooks, the base pay of the wait staff, and of course the owners cut in profit.
So it’s actually a pretty good play to go to a fancy steakhouse and order two filet mignons and two waters. You get a fabulous steak, not far marked up off its base price, plus all the ambience and expert cooking for close to free.
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