3 ms·
This is because labor is much more expensive than food. So the cost of a $15 meal is maybe $5 food. If you make the meal 20% larger and charge 10% more for it,
by rsj_hn 5y ago
This is because labor is much more expensive than food. So the cost of a $15 meal is maybe $5 food. If you make the meal 20% larger and charge 10% more for it, you do it, since then your costs go up by $1 but your revenue goes by $1.50. That process ends up in huge portions as people think they are getting a 20% more value for 20% more food (which they are) and so you may even sell more of the 20% bigger $16.50 meal.
As with anything else, to get smaller meals the food/wage price ratio needs to be larger. Food in America is absurdly cheap compared to most other nations.
- cafard 5y agoUpvoted. A friend of mine likes a local deli. The third or fourth time I joined him there, I remarked that the portions seemed sized for people doing hard physical labor all day--digging ditches or working on a loading dock--but that the clientele didn't seem to be laborers. He remarked that with comfort food, the ingredients are the least part of the cost.