Quality meat? Quality cooking? Staff and other overhead costs? Etc.
In: Economics
When you go to a fancy steakhouse, you are paying for a few things at that premium.
1. You are (hopefully) getting a high quality piece of meat. A good steakhouse might work with a quality ranch or supplier that works with those quality ranches. The cattle are bred with the selected genetics to produce good meat, and the cows are raised in a manner that the meat will be delicious when slaughtered. Fed the right things, given the right amount of exercise, not stressed, etc, all of which can affect the flavor of meat.
2. You are paying for the expertise of whoever is cooking your steak. The chef should know the right combination of spices, cooking temps and duration, etc. The restaurant likely has high quality kitchen equipment to ensure (almost) every steak that comes out is cooked to the customer’s liking.
3. You’re paying for the service. At a fancy Steakhouse, you should have professional and courteous wait staff who regularly checks in with you for anything you need. Need more drinks? They should check with you before you finish your last drink. The steak not cooked to your liking, they should check in with you to ensure it is before you have to flag them down and let them know. If you are unhappy with the steak for any reason, they should be able to have the chef cook you a new steak to your liking.
4. You are paying for atmosphere. A fancy steakhouse should give you an elevated dining experience. The decor should be nice and “upscale”, giving you an feeling that you are in a place of high class. Meal pricing should “weed out” those who are not up to this “standard”.
5. You are paying for the steakhouses overhead and margins. Running a restaurant of anytime, typically has low margins. Food, even in raw form, is expensive. The restaurant has to make a profit to keep it’s doors open. Quality wait staff and cooking staff comes at premium wages. Nice decor is pricy and needs to be replaced when it gets used too long. Electricity, water, etc are all monthly costs. They need to add a bit of a buffer for those meals that are served that are not up to the customer’s standards. Restaurants need insurance too which covers a whole manner of things. There are many licenses they need to pay for in order to serve food to the public. They need to make sure the kitchens are near spotless clean every day and in ideal operation to keep up with strict health code regulations.
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