Saturday, October 21, 2006

MYSTERY OF THE RAPIDLY ESCALATING MEAL PRICE


During dinner with my long-time (since grade school, imagine that!) friend Sh. last week [see previous post about Zensho Japanese resto], we wondered why the eat-all-you-can price for dinner was PHP100 higher than for lunch.

I have also observed this for Alba's Restaurante Espanol, which charges PHP475 and PHP575, respectively, for their lunch and dinner eat-all-you-can buffets (including paella and cochinillo). Quite frankly, i've always wondered why they set different prices for the same type of meal.

The obvious answer is that there must be some special dish(es) available in the dinner buffet, which isn't offered during lunch time. But this doesn't seem to be the case for Alba's, based on the couple of times i've eaten there.

And i know that in the US, one can see from the menu of some restos that entrees are priced higher during dinner than for lunch. (One Japanese resto in SanFo comes to mind) So why this price difference?

Sh. and i formulated some theorems:

Is the dinner crowd generally more affluent, and can afford (or is willing) to pay a higher price? Thus, the resto is maximizing profits by charging more.

Or does the dinner crowd eat more food, costing the resto more money? Therefore, the resto charges more to maintain its profit margins.

Or does the dinner crowd take more time eating (unlike the lunch crowd, which is more likely to have to go back to the office, etc.), thereby reducing the resto's turnover, and forgoing income from people who wanted to eat, but didn't want to queue? Thus, the resto charges more to compensate for the foregone income from would-be customers.

Or perhaps it is more costly to serve dinner (i.e. electricity costs, security / parking attendant, overtime pay for waiters, etc.) than lunch? Hence, the resto charges more to cover the extra costs.

Or maybe the resto deliberately sets the price for lunch lower, hoping customers would eat during lunch time (i.e. "slow" period), instead of dinner time ("peak" period)? But this assumes customers are flexible and/or indifferent regarding when they can or when they want to go to the resto.

Sh. and i failed to find an explanation which totally satisfied us.

Can anyone out there provide the answer to this dismal economist?

3 comments:

Anonymous said...

hi grumpyurbanslacker! glad to have found this...i've always liked the way you wrote. :) i'm thinking it's because of the turnovers. hahahaha (i really read your blog!) i should tell stan about it. how ya been, dude?

Jacs said...

When in doubt, blame it on the government.

undiscussablerealms said...

"Or perhaps it is more costly to serve dinner (i.e. electricity costs, security / parking attendant, overtime pay for waiters, etc.) than lunch? Hence, the resto charges more to cover the extra costs."

and people eat more.