Quality meat? Quality cooking? Staff and other overhead costs? Etc.
In: Economics
Luxury real estate. Restaurants can spend from 5%-40% of their revenue on rent and utilities. Depending on the type (fast food, sit down, cafe) and location.
1. Prime beef. Perfectly cooked the first time, brought to the table hot.
2. Service. Excellent service, keeping the table clear, scraping off the crumbs, being diligent with refills, and basically never having to wait for anything. Usually this is achieved with more people. A server will serve less tables so they can serve the ones they have better. There will be more busers and drink refillers floating around, ect.
3. Excellent sides, typically better than the your run of the mill cold tiny baked potato. A big potato, again HOT. All the fixin’s. Your choices will be more than just potato or fries too. They’ll have creamed spinach, or sweet potato casserole, sauteed mushrooms stuffed with crabmeat, and Veal Ravioli’s and Lobster mac and cheese. Ect..
Agreeable consistency.
A stable and consistent experience has not been mentioned yet. One of the huge advantages steakhouses have in the USA is that you can expect a level of service and quality that is of a known variable. It’s not a bold choice. As long as your clients eat beef or fish you will feed them a decent meal and alcohol in a controlled environment.
Trendy steakhouse? Overall the same atmosphere on a Tuesday as the other steakhouses around. Maybe a couple wild menu items your great grandparents wouldn’t approve of until they tried it and realized it wasn’t so wild and is still a safe bet.
I HATE STEAKHOUSES. Please quit taking me to steakhouses. Take me somewhere with alcohol and AMAZING, UNIQUE food if we are expensing it.
If I wanted a steak, I’m grilling it blue to rare and eating it over a trash can like a wild animal.. and my sport coats are fitting a little tight this year.
Steakhouses remind me of corporate Christmas parties, sales, and a lack of inspiration. They represent every time my girlfriend says “she is okay going anywhere” or “I don’t know what I want”. It’s an agreeable choice. It’s where my SO doesn’t want to go either and if she goes, she is eating fish or seafood… but no one will complain about the experience or the service, because it will be agreeable.
*- An ungrateful client that’s been fed too many $25-35 a la carte sides and $45 bourbons.*
General rule of thumb I was taught is that menu prices are roughly 3x that of food costs. If the place is fancy, then more costs for extra labor and fanciness would be added.
The meat alone can easily be $30+ for a nice cut even in bulk. They have to pray the prep cooks who are cutting up all the sides and often cutting the meat, they have to pay the line cooks who actually cook it all, they have to pay the hostess. They also potentially have to pay the server and bartender. Management also needs to get paid
Then there’s rent, the decor, utilities, maintenance on the kitchen equipment, and tons of other stuff like most places have a cleaning crew every now and then for certain parts of the kitchen or paying to dispose of fry oil and stuff like that.
Basically your steak pays a little bit for all of those things. The nicer the place the more expensive those things often are. Then end of the day they also need to make money off of it. A nice steak place you’re often going to sit down for atleast an hour maybe 2-3 so that’s a lot less guests they can serve so they need a bigger profit margin
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.
Tbh your ability to be lazy. You can get that same cut of meat for less than half the price and cook it yourself, it’s NOT hard to cook a steak.
a “fancy” steak house will presumably use choice cuts, which cost more.
beyond that, the experience, the ambience, etc. all factor in to the price. you could probably get the same steak at lonestar for half as much.
is this really that confusing?
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.
It really depends, in some cases (especially with chains) you’re paying for the name and atmosphere. You usually are also paying for higher grades of steaks but that is not always a given, even famous high end places like Peter Leuger’s has majorly slipped over the years.
Latest Answers