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This touches on a question I've been pondering lately: why isn't it cheaper to eat out than to go grocery shopping? Obviously, this doesn't apply to fancy rest

This touches on a question I've been pondering lately: why isn't it cheaper to eat out than to go grocery shopping? Obviously, this doesn't apply to fancy restaurants, but it seems to me that due to economies of scale there should be some class of budget "eating out" offering that is actually cheaper than if you were to make it yourself.

oarsinsync 10y ago
McDonalds dollar menu?
nostrademons 10y ago
You're paying for the service. The parts of the food chain that enjoy economies of scale are in raising, harvesting/slaughtering, preparing, distributing, and cooking the food. Plating the food and bringing it to your table has no economies of scale, good service has diseconomies of scale, and dishwashing has only mild economies of scale. There is a category of food - store-bought prepared, grab'n'go, and fast food - that actually does move the cooking to the institution, and these foods aren't much more expensive than prepping them yourself (certainly cheaper when you count the cost of labor). You have freshness & selection limitations on them, though: since non-refrigerated food goes bad within an hour or two after being cooked, they're limited to those items that can move in sufficient volume that at the scale they're being cooked, they'll sell within an hour.
- losvedir 10y ago
  Yeah, I guess I didn't make clear by "eating out" but I don't mean sit-down service at a restaurant. Just any sort of institution that provides cooked food to me. I suppose you're right that "fast food" might be cheaper, but it's so unhealthy. I would think some business offering rice, beans, lentils, teeeeny bits of meat, cheap but fresh vegetables could still come in cheaper than preparing food yourself, provided they don't have to wait your table or anything. Maybe they only offer one or two meal options and it's somewhat pre-cooked.
  - nostrademons 10y ago
    That'd probably work on a unit-economics basis but fail on a volume basis. In order for cooking-at-scale to work, you need to drive sufficient sales within your local area that you can ensure that food is bought within a few minutes after cooking it. The vast majority of people buy by taste rather than by healthiness. (Otherwise, we wouldn't have such an obesity epidemic in the US.) Incidentally, in markets where there are a fair number of health-conscious yuppies, you do get healthy fast-food restaurants, eg. Loving Hut in SF/BayArea. I hear Portland has a big food truck that scene that's somewhat similar.
pix64 10y ago
Paying employees. Not to mention cost of the land, building, and repairs which are "free" in your own house because you're already paying for it.

oarsinsync 10y ago

McDonalds dollar menu?

nostrademons 10y ago

You're paying for the service. The parts of the food chain that enjoy economies of scale are in raising, harvesting/slaughtering, preparing, distributing, and cooking the food. Plating the food and bringing it to your table has no economies of scale, good service has diseconomies of scale, and dishwashing has only mild economies of scale. There is a category of food - store-bought prepared, grab'n'go, and fast food - that actually does move the cooking to the institution, and these foods aren't much more expensive than prepping them yourself (certainly cheaper when you count the cost of labor). You have freshness & selection limitations on them, though: since non-refrigerated food goes bad within an hour or two after being cooked, they're limited to those items that can move in sufficient volume that at the scale they're being cooked, they'll sell within an hour.

losvedir 10y ago
Yeah, I guess I didn't make clear by "eating out" but I don't mean sit-down service at a restaurant. Just any sort of institution that provides cooked food to me. I suppose you're right that "fast food" might be cheaper, but it's so unhealthy. I would think some business offering rice, beans, lentils, teeeeny bits of meat, cheap but fresh vegetables could still come in cheaper than preparing food yourself, provided they don't have to wait your table or anything. Maybe they only offer one or two meal options and it's somewhat pre-cooked.
- nostrademons 10y ago
  That'd probably work on a unit-economics basis but fail on a volume basis. In order for cooking-at-scale to work, you need to drive sufficient sales within your local area that you can ensure that food is bought within a few minutes after cooking it. The vast majority of people buy by taste rather than by healthiness. (Otherwise, we wouldn't have such an obesity epidemic in the US.) Incidentally, in markets where there are a fair number of health-conscious yuppies, you do get healthy fast-food restaurants, eg. Loving Hut in SF/BayArea. I hear Portland has a big food truck that scene that's somewhat similar.

pix64 10y ago

Paying employees. Not to mention cost of the land, building, and repairs which are "free" in your own house because you're already paying for it.