Sneaky restaurant tricks: Ten to watch out for
Filed under: Budgets, Entrepreneurship, Food
Restaurants are feeling the pinch in two directions. With money tight, consumers are cutting back on how often they dine out. Meantime, food costs more. Way more. Egg prices have doubled in the last six months. Dairy, chicken, beer and bread crumb prices are all climbing higher. Even when the core commodity escapes the trend, packaged ingredients and other restaurant supplies are more expensive as the costs of transportation climb due to higher fuel prices.
When people do go out, they are ordering less. "Appetizer sales are down. Dessert sales can almost disappear," says Dan Simons, principal at Vucurevich Simons Advisory Group, a restaurant consulting firm. "And the most expensive items on the menu aren't sold as much."
Restaurants know there's a limit to how much they can raise prices without driving off already broke customers. So for now, many are looking for ways to raise prices and cut costs that won't be too obvious.
The next time you go out -- if you can afford to go out at all -- see if you can find your favorite restaurant working any of these old gimmicks. Read on and you may even learn some tricks you can use to stretch a buck in your kitchen at home:
Cut back on portions:
Restaurants normally spend between 25% and 40% of their budgets on food, according to Barry Brown, president of Profit Strategies Solutions, which sells software for restaurants to manage inventory and profitability.
So if they can make a smaller hamburger and still sell it for the same price, their profits go up. Milk shakes at family diners that could once be split three-ways may now truly be single serve. There are reports of some restaurants buying smaller plates so customers won't notice they have reduced portions and chefs won't be tempted to heap on food to make dishes look appealing.
Eric Arthur, president of Marketplace Management Group, a restaurant procurement company in Collierville, Tenn., expects to see more junior-sized portions offered on menus. "You might have a shot-glass-sized dessert. It gives the customer the opportunity to say 'I can still have some dessert' and it gives the owner the opportunity to still add a dollar to the bill," says Arthur.
"Americans have been kind of spoiled. We have supersized everything," Arthur says. "That's not necessarily the way it is in the rest of the world."
Cut back on the most expensive ingredients:
Maybe the recipe calls for five sticks of butter. In good times, the baker adds six because she thinks it tastes better. But in tough times, she'll stick to five (or worse, substitute a stick or two of margarine in the recipe). The chef may prefer to load up on shrimp when preparing his signature gumbo, but he knows his job depends on restricting the number to four or five per serving.
Brown recommends restaurateurs get very strict about standardizing portions at times like these. They might tell their cooks, for example, to use 10% less chicken in entrées or chop off less of the strawberry when they make shortcake. "Usually, either they switch to a scale or offer additional training," says Brown.
Managers may shift to dishes that call for less expensive ingredients -- for example, from beef to chicken or from chicken to pasta. Consumers may want these lower priced alternatives, and restaurants like them because they can often make a higher profit margin on them.
"If you see a resurgence of liver and onions, don't be surprised," says Simons. "It's an old school comfort dish for a lot of people and the cost is low."
Maybe the chef used to get the highest quality beef available. Those generous days may be coming to a close. If you see a menu item for some kind of marinated steak, it may be a flank steak, a cheap, tough cut that has been marinated and pounded to submission, said one chef at a private club who asked not to be identified. You may see more items with ground chuck, otherwise known as hamburger.
One chef who works with VSAG says that he makes up for the everyday image of hamburger meat by insisting on only the freshest beef from his vendors. "I know it's not super fancy, but if prepared well it is heavenly," says the chef. "It is all about the age of the chuck: the fresher the better! 'No age please,' that is what I insist to my vendors when ordering chuck."
Cut back on freshness:
Food distributors are charging restaurants fuel surcharges these days because of high gas prices. So, restaurants are trying to cut back on the number of deliveries they get. Instead of getting fresh produce every day, they get bigger quantities less frequently.
Other kitchens may switch to frozen for items that they rarely use but want to keep on hand, such as avocados.
Use everything (even if that means recycling items):
Here's a simple example: The chef may prefer to discard tomatoes that aren't the ripest red. But, these days, to make use of every last tomato ordered, you might see a few green slices make their way onto your hamburger.
Restaurants also need to be extra-efficient about using everything they buy. In order to be prepared for a dinner rush, they need to have lots of extras on hand -- rolls, desserts, side dishes, cuts of meat for entrées. But if they have a slow night, they don't just throw the extras out.
An efficient manager knows how to use every last piece of food. That new special soup? Could be just an excuse to use some meat and vegetables they got for another dish but didn't sell. A salad bar can be the serving site of last resort for cheese or vegetables that are about to turn. See lots of chili? It may be a disguise for leftover hamburger. Bread pudding? That's yesterday's Danish. Homemade croutons? A great use of stale bread. Potato skins? A terrific way to use the leftover baked potatoes (which have to be baked in advance because they take so long.) Potato soup? More rerun potatoes.
You get the message.
Pour weaker drinks:
Your favorite bartender is probably not stingy with portions. Bartenders have a way of pouring generous drinks and maybe even offering one on the house. But now his boss may be breathing down his neck to ensure he is not so glad-handed.
The biggest wasted item at restaurants that Brown sees is liquor. "It isn't necessarily theft, just over-usage of the item," Brown says. "It's not even that they're sloppy or generous. It's just not being a machine." Now the price of beer is rising, putting owners on high alert.
Bartenders can easily over-pour a drink without even trying (of course, the potential for a good tip doesn't exactly disincentivize them). In the United Kingdom pubs must sell liquor in 25 ml or 35 ml servings and have bar gadgets that pour exactly that amount. Maybe they'll start becoming a common sight in the U.S., too.
Switch to a cheaper brand of certain ingredients:
Restaurant owners have become compulsive shoppers. That's quite a change. Eric Arthur says restaurant owners normally stick with the same supplier year after year, almost like baseball players stick with lucky socks. Now they're trying many suppliers and many brands.
For restaurant owners who are less fastidious on quality, a switch to a cheaper supplier can mean lower quality. If your favorite grilled cheese doesn't taste quite as good as it used to, a change in supplier could well be the reason.
Don's Dock in Des Plaines, Ill., is one of the most popular seafood restaurants in the Chicago suburbs. Owner Andrew Johnson, whose family has been in seafood for 70 years, is determined not to skimp on the fish and shrimp. "With our seafood, we're not going to sacrifice the quality," Johnson says. "We just shop around more."
The huge hike in grain prices means that a bag of breadcrumbs went from $19 a bag to $37 over the last year. Instead of shifting to a lower quality, Johnson spends more time comparing prices. "For breadcrumbs there used to be one or two suppliers. Now we have six or eight purveyors," Johnson says.
Switch to cheaper toilet paper, take-out containers and bags:
"Paper and disposables, oh my gracious, that's the very first place I start," says Arthur. "There are big bucks, I mean, big, big bucks in that." Sometimes owners can get the same items for less if they just spend more time shopping. Or, they may decide that food quality is sacrosanct but napkin quality is not.
Arthur asks restaurant owners what they pay for cups and trash bags and is often surprised by the answer. "Someone may be paying $80 a case for trash bags that they could be buying for $20," he says. "Do you know how many extra sandwiches they'd have to sell to make up that $60?"
Push the highest profit margin items, not the best-tasting ones:
"Most restaurants want to sell the best thing on the menu," says Arthur. "They're not thinking, 'What's the thing I'm going to make the most money on?'" That changes once they figure out their food costs.
Often the signature dish may not be all that profitable. But a pasta dish can offer a low cost for the eater and a drastically lower food cost for the restaurant. Arthur recommends restaurants look to add low cost, high margin dishes. In other words, it's better for them to make $2 off a $12 entrée than to make $2 off a $25 dish -- even though making the $25 dish may be more fun.
Another technique: A restaurant that uses a professional menu designer will steer eaters to the high margin items. Big chains are already well-practiced in this mystical art; now smaller restaurants are seeing what a boost it can give their bottom line, says Michael Kristoff, president and creative director of Kristoff Creative, a Nashville, Tenn., design firm.
"There's a psychology to it, an engineering the placement of things," says Kristoff. "The third item in a list is generally the most selected item. So that's where you would put your highest margin item." Profitable items may also get stars or boxes around them. You may see prices de-emphasized. Kristoff steers restaurants away from the typical diner menu where all the prices line up in a column.
"That's the last thing you ever want to do -- the number one biggest mistake," Kristoff says. "People easily see the prices and start shopping by price. Price should be the last consideration. People on budget are going to do that anyway but you don't want to force it on them."
Slowly raise prices so it's not as noticeable:
Restaurants normally raise price only once or twice a year. Now you'll see many more increases along the way. That's because prices are moving as much in a month as they used to in a year.
Andrew Johnson has had to raise prices four times in the last two months at his seafood restaurant. He now prints only 500 menus at a time instead of 5,000. He used to check his ingredient prices every couple months; now he makes sure to look every week.
Eric Arthur says restaurant owners are always reluctant to raise prices, fearing they'll drive off customers. But he's worked to convince his restaurant clients that in this downturn, the only restaurants that survive will be the ones that raise their prices regularly to keep up with costs.
Beg for sympathy from your customers:
You may start seeing signs about higher commodity prices. Or news articles pinned to the window. Or hear desperate justification of the higher prices in a conversation with the owner. They want to make sure you know they're not just being greedy.
Most restaurateurs are passionate about keeping their food quality up and won't compromise on their signature dishes. But with customers cutting back on dining out and food prices soaring, they have little choice but to find creative new ways to trim costs.
Carol Vinzant is a freelance writer in New York.



Reader Comments (Page 1 of 6)
5-15-2008 @ 7:14AM
Sophia said...
I have often believed that why o many Americans are overwegt is because we exect large portions from resturants and they serve them. I was just wondering if this isn't a good opportunity for us to eat smaller portions which may cu down on the many overweight Americans? Just a thought that it might be a good thing in that aspect.
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5-15-2008 @ 8:00PM
Raymond Barcelos said...
Maybe the day will come when most people will eat at home and not go to restaurants. Is that a novel idea or what?
5-16-2008 @ 12:31AM
Phil said...
Yea, when I was still in my 20's.
Now in my mid 50's a half portion is plenty.
No, I am not over weight and far from it at 5 foot 9 inches and 146 pounds.
6-20-2008 @ 9:29AM
noreen somma said...
Sophia makes a very good point here and since I cannot reply directly to "Kathy" who seems to be an expert on spelling....I will do it here. Your reply and comment to this post was just plain mean, nasty and rude and it was totally uncalled for. I have never posted any comments on this board before, but when I saw what you did it provoked me to do so because it really p***sed me off!
6-21-2008 @ 10:04AM
Derf III said...
Yeah. Right. Get skinny. Eat less.
You TOO can be a poster child for Third World hunger ...
How about lower prices with less a portion?
Hey. The worst thing is to be at a ridiculously high priced restaurant and get a huge plate with some pathetic looking tiny pigeon leg sitting like a speck of debris lost in the Pacific ocean, with a little sprig of seaweed (?!!) artistically washed up against it - not enough to feed an ant colony for twenty minutes.
We aren't French. Give us American portions.
We'll pay for them. Fair price - Square meal.
6-21-2008 @ 3:31PM
Colonel Le Valle III said...
You have a point .. this is a great opportunity for us to lose weight. It would be good for me as an individual AND I AM SURE IT WOULD BE OK WITH most of the Restuarant Owners. The prices would remain the same and we would get less portions.
I AM SURE THIS WILL WORK.
6-22-2008 @ 12:06AM
EMMIE said...
DID YOU READ WHAT YOU WROTE BEFORE YOU POSTED IT OR WERE YOU JUST HAVING A BAD DAY??? CHECK YOUR SPELLING HUN.
5-15-2008 @ 7:56AM
joann s. said...
my daughter and i recently went to red lobster for lunch and after paying 60.00 for lunch we decided we would never go back to red lobster for lunch anymore...they just raised their prices out of our business......dont they realize there is a point of no return ??......i expect to see many restaurants go out of business...people just cant afford to eat out anymore....for that matter , it is getting harder to buy groceries too.....
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5-15-2008 @ 12:38PM
LarryAndKimmy said...
My husband and I have never paid $60 for a Red Lobster lunch in our lives! Their lunch portions are plenty big and when you include the delicious salad and biscuits they serve prior to the meal - well, it's more than plenty of food. As a matter of fact, our lunch cost has never exceeded $27.00 including a 20% tip. Did you each order Market Price lobster?? Good luck in the future!
5-17-2008 @ 1:54PM
Sally Gellert said...
If you thought about the number of lobsters left in the world's oceans, and the cost of transporting them without spoiling, you'd perhaps better understand the high price of lobster. The world has overfished lobsters to the point at which they should probably be consumed only as a special-occaision treat, if at all. I think Red Lobster has been irresponsible for pricing its seafood so low earlier and now faces the consumer backlash from reflecting the true cost of seafood. According to Dr. Sylvia Earle, world-known marine biologist and author of Sea Change, the best way to eat seafood from an environmental standpoint is farm-raised catfish or farm-raised tilapia.
5-21-2008 @ 8:14PM
Kathy said...
Red Lobster is a total rip-off. They offer small portions at big portion prices. I don't mind smaller portions but why should I have to pay for an order that is not worth the price. Needless to say, I don't eat there anymore.
5-25-2008 @ 6:19PM
JoAnn said...
The price tags at alot of major restaurant chains are rising.
The portions were very large and you are probably now getting what you are paying for not excess as before in some cases.
Anyone who is fighting the battle of the waistline KNOWS that smaller portions is a major deal in winning the battle. Most foods that we eat out aren't health in the portions that are served and to find a large portion of healthy food is a rarity.
The best deal is to go shopping and buy the health food and prepare it at home and the health way.
Unfortunately, the fuel prices are going to impact the availablity of the fresh foods through the production of them as well as getting them to us.
5-25-2008 @ 10:31PM
Louise Alcott said...
I hate Red Lobster.. Here in KY we wait forever to get served, high price, small portion... small baked potato, and skimpy salad. They expect you to to fill up on the cheese bisquits, which are the only thing there that I really find outstanding.
5-15-2008 @ 9:01AM
Denise said...
Portions sizes are out of control in the US. Americans need to STOP BEING GREEDY and complaining about eveythng. Pay for what you order and don't expect to get extra for free. That may be the reason so many of us are FAT.
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5-17-2008 @ 1:53PM
Sally Gellert said...
I agree; America as a nation consumes far too much. In the past, I often felt that restaurants felt compelled to serve large portions to justify the high prices they charged. A return to smaller portions makes sense, especially as many of us were trained to clean our plates. If I don't finish something, I never return leftover food -- I take it home for another meal. It doesn't help the restaurant's bottom line, but it helps my budget when smaller portions aren't available.
5-26-2008 @ 1:27AM
KiheiTek100 said...
It doesn't matter where you go...the mall, grocery store, or walk by several restaurants along the way, there are so many freakin' fat people all around!! Why the hell can't they slim down & stop taking up sooo much space when people are trying to get by them?? Those fat people are annoying!! If prices are rising tremendously, that doesn't mean the fat population will reduce their spending @ restaurants!!
6-27-2008 @ 11:08PM
prem said...
After reading your comment; I was disgustingly cheerful.
everyone should stop complaining and learn how to cook;
one could have top of the line ingredients with a good inexpensive wine; a small dessert and be in heaven; but the issue is people do not know how to cook;or have no time to do so. Knowledge is Power; know the seasonal ingredients and enlighten yourself by reading about wines, you would be surprised how superbly interesting that would be and inexpensive too.
5-15-2008 @ 9:06AM
Richard N Palmer said...
Restaurants that provide a good product, are well managed and wow the customer with great service will not need to submit to trickery as a means to stay in business.
Reply
6-19-2008 @ 10:12PM
suzann said...
RRichard - you said exactly what I was trying to - excellant point.
5-15-2008 @ 9:09AM
Erwos said...
That was a really fantastic article, Carol! Excellent read!
I don't blame the restaurants that we eat at for raising their prices a bit. Food is more expensive for everyone, and expecting the owners to lose money to feed me is silly.
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