how do restaurants calculate the prices of each dish? Do they accurately do it or just a rough estimate?
In: Economics
A well run restaurant knows exactly what they are spending.
The best example of this for me was a restaurant I worked at when I was in college in the 90s.
Coffee and soft drinks came with free refills.
Entrées came with all you can eat soup and salad.
Management had calculated exactly how much salad the average customer ate, and knew what the food cost of that was.
The data point I still remember was soft drinks : their calculation was that (including refills), a customer drank nine cents worth of pop. So getting customers to order a $1.99 Coke was very important for the restaurant.
The mandate from ownership was that overall food cost needed to be 30% or less. In other words, a $20 meal needed to have less than six dollars of actual food cost on the plate. The rest of the price went to paying staff, and all of the overhead of running the building.
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