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Taking a look at the value of Larry along his journey (as the author does): Larry's value out of the water: $8.00 Value after staying at LobsterWorld: $9.30
by TheBiv 12y ago
Taking a look at the value of Larry along his journey (as the author does):
Larry's value out of the water: $8.00
Value after staying at LobsterWorld: $9.30
Value after staying at Tangier (aka lobster spa): $11.60
Value after flying FedEx: $14.40
Value after passing through wholesaler: $17.40
Value on plate: $52.20
It looks as though the 'voodoo' (if there is any) of lobster economics is mainly set by the restaurant who marks up the product.
- lisper 12y agoExcept even then there is no voodoo: the restaurant has costs far and away above the cost of good sold: labor, rent, furniture, dishwashing, etc. etc. etc. The actual profit margin even at retail is razor thin.
- TheBiv 12y agoIs a 3x markup on a main entre normal in restaurants? Meaning, would a $30 steak cost $10 to acquire?
- krisgee 12y agoYes. 1/3 of your plating price as the wholesale cost of the ingredients is pretty standard.
- jonchang 12y agoFrom the article: An excellent lobster dinner for $30 is good value. I now knew, however, that the actual cost of Larry was barely $10 a pound. But that’s the formula in the restaurant business. “On the industry standard theory,” Chris said, “a third of what you sell it for is food cost.”
- TheBiv 12y agoAh, I guess I read too fast!! Thanks for the note!
- rm445 12y agoI read an interviewer with a restauranteur who stated the recieved wisdom was that the revenues from running a restaurant should be split around 30% ingredients, 30% overheads, 30% staff and 10% profit.
- habosa 12y agoPretty much. A $30 steak in a restaurant is probably either something like an 8oz filet or a 12oz strip steak. You can cook either of those at home for around $10 (plus the cost of seasonings and sides).
- mhb 12y agoFor an entertaining book describing the restaurant business. Restaurant Man by Joe Bastianich: http://www.amazon.com/Restaurant-Man-Joe-Bastianich/dp/B00B9ZCXU0 http://www.amazon.com/Restaurant-Man-Joe-Bastianich/dp/B00B9... Linen is the number-one evil, because it is expensive and no one pays for it. Same with bread and butter. ... paying a dollar and a quarter for a tablecloth and thirty-five cents for each napkin that someone gets dirty before they even have their first drink is a drag.
- VLM 12y agoThe reason for the disbelief is an often repeated on HN in all cooking related articles, that it is impossible to cook a meal cheaper than buying at a restaurant. Because restaurants get their food so cheaply in bulk and few of them make much of a profit.
- deleted 12y ago[deleted]
- pkaye 12y agoSo does the rest of the companies along the delivery chain.
- randallsquared 12y agoThe article also points out that after paying the chef, wait staff, etc, the restaurant makes about $4 on that lobster dinner. I think the reason it seems weird is that we implicitly assign the same effort-value to each of these stages, but in fact the restaurant has more work to do per lobster than any of the previous stops in the chain.
- jthol 12y agoMore work but they are also in a very high rent area compared to all other steps.
- mattmanser 12y agoActually, he pulled a fast one there by using percentages. Just because a meal is expensive doesn't mean it suddenly pays more of the rent. It's the profit margin while he's making a loss on other meal. If all those diners had bought a $40 meal instead, the rent would not have magically decreased.