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In US urban areas, rent is a dominant cost, so low end/casual restaurants are trying to keep purchases in the $10-15 range. A Chipotle in a business district ma

by galago 8y ago

In US urban areas, rent is a dominant cost, so low end/casual restaurants are trying to keep purchases in the $10-15 range. A Chipotle in a business district may only be able to handle a fixed number of customers, so its difficult if people purchase items a la carte. The 'solution' is to provide larger portions than the average customer wants even though there's diminishing returns. At the low end burger restaurants struggle when people are purchasing off of 'value menus.'

cptskippy 8y ago
What you said doesn't make any sense to me at all. You seem to be drawing conclusions and making assertions by conflating low end casual dining with fast good. You state that it's difficult for a fast food restaurant to manage a la carte purchases when that's exactly what they are designed to do. Their entire business model is based around an a la carte menu. You then justify larger portions as a means to mitigate customers ordering additional portions. The reality is that for most casual or low end dining the customer knows what to expect and orders appropriately. At best your assertion about large portions would only work to satisfy first time customers.
- saltcured 8y ago
  A core problem is a customer thinking that serving size and price should be proportional. Most of the real costs are independent of portion size, i.e. real estate, capital, and labor. The raw ingredients in restaurant food just aren't that much of the total cost. The rest of the differences between fast food or fine dining come down to the quest to find local maxima in this problem space. Fast food can bring the total cost closer to the raw ingredients by increasing the utilization of real estate, capital, and labor. A fine dining restaurant needs to dedicate much more real estate and staff to each customer, since they cannot serve as many customers in one time period. At the same time, they probably need at least some higher cost ingredients to satisfy the different expectations of a customer willing to pay higher prices.

by galago 8y ago

cptskippy 8y ago

What you said doesn't make any sense to me at all. You seem to be drawing conclusions and making assertions by conflating low end casual dining with fast good. You state that it's difficult for a fast food restaurant to manage a la carte purchases when that's exactly what they are designed to do. Their entire business model is based around an a la carte menu. You then justify larger portions as a means to mitigate customers ordering additional portions. The reality is that for most casual or low end dining the customer knows what to expect and orders appropriately. At best your assertion about large portions would only work to satisfy first time customers.

saltcured 8y ago
A core problem is a customer thinking that serving size and price should be proportional. Most of the real costs are independent of portion size, i.e. real estate, capital, and labor. The raw ingredients in restaurant food just aren't that much of the total cost. The rest of the differences between fast food or fine dining come down to the quest to find local maxima in this problem space. Fast food can bring the total cost closer to the raw ingredients by increasing the utilization of real estate, capital, and labor. A fine dining restaurant needs to dedicate much more real estate and staff to each customer, since they cannot serve as many customers in one time period. At the same time, they probably need at least some higher cost ingredients to satisfy the different expectations of a customer willing to pay higher prices.