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Your $25 steak dinner cost about $6 in foodstuffs. If a tariff raises the cost of that raw material to $8, it would be absurd for that entire meal to now cost $
by megaman22 8y ago
Your $25 steak dinner cost about $6 in foodstuffs. If a tariff raises the cost of that raw material to $8, it would be absurd for that entire meal to now cost $32. Much of the cost in restaurant prices is wages, and rent, and other overhead, not the actual food.
- tinus_hn 8y agoThe overhead also grows because the waste is more expensive. Also if things the employees need, like food, become more expensive, they’ll need more wages.
- danieltillett 8y agoYou are correct, but most restaurants just multiple the food cost by 4 to set the price. It is rather silly, but that is the way the industry works.
- mchannon 8y agoI don't think it's silly to come up with a pricing method that is simple and uniform to apply. However, "4" can just as easily morph to "3" or "5" if the fundamental costs change industrywide.
- danieltillett 8y agoIt is silly because food cost is only one part of the cost of providing a meal. Really all of the costs should be dumped into a program which spits out exactly what to charge for each menu item.