How much restaurants can charge before they stop eating

Image for article titled What makes us stop eating out?

Photo: Andrey_Popov (Shutterstock)

It’s no secret that when you dine out becomes too expensive, people tend to cut back and start cooking at home a bit more often. But what exactly is “too expensive”? It’s hard to imagine the level of price increase that would take me away from an order of fried pickles and chicken wings, but as catering company reports, a recent study of consulting firm Revenue Management Solutions seems to have found the consumer breaking point.

Why restaurants are raising their prices

Because inflation is pushing operating costs higher and the restaurants rely on repeat business to weather the stormmore popular channels than ever began deploy loyalty programs (Where reorganize their existing).

Chipotle recently changed its program in a way that requires loyal customers to spend more than before to earn “free” food. Previously, it cost Chipotle Rewards members $140 to get a free item; now it costs $162.50. Dunkin’ is also in the process of reworking its loyalty program. Previously, Dunkin’ Advantage members could win a free drink after spending $40. As part of the new Dunkin’ Rewards, a free drink costs $50 in purchases.

The consumer breaking point

We all have some tolerance to price increases. A a few bucks here or a little narrowing that won’t stop some of us from indulging in the foods and snacks we love. Yet, after analyzing in-store price increases for 25,000 locations, Revenue Management Solutions Found that if a restaurant raises its prices by more than 10%-13%, it will basically be about sending customers out the door.

Although consumer perception of inflation is actually worse than what actual numbers indicatethat does not mean that the impact is less real. The consultancy also surveyed consumers, 45% of which said they are currently choose to eat less in restaurants; others said they order cheaper items or dine at more affordable places. Generally, consumers immediate response to rising costs is to cut back, seek deals and/or avoid unnecessary expenses. Of Restaurants Looking ahead, the only way to offset the rising cost of ingredients and labor is to raise prices, but only to a certain extent, as customers don’t earn more to keep up with the extra spending. . Inflation puts everyone in a difficult situation.

Comments are closed.