INSIGHT INTO RESTAURANTS CHARGES – What do We pay For?

Have you ever been shocked by paying $50 for a Ribeye Steak? Ever thought that with the $24 you are paying for your pasta you can make about 6 or more of the same at home? Ever complained about a $15 glass of wine when you can get a whole bottle at the store for the same amount or less?

I HEAR YOU! HOWEVER…

QUALITY DOES NOT COME CHEAP. “You get what you pay for”, my Mom always says.

I am a foodie. I ADORE dining out and culinary experiences and even though I’m not a chef, I think I know what a GOOD MEAL is.


I want the flavors to be what they are supposed to be, according to my knowledge. I HATE bland, watered down, covered up in sauces food.  Chicken is supposed to taste like chicken, pork is supposed to taste like pork and salmon is supposed to taste fishy…oh…dah… IT IS fish!

Unless these are FRESH (not frozen) the flavors just won’t be there. And we all know that FROZEN is CHEAPER than FRESH.

DIFFERENT LOCATIONS, DIFFERENT PRICES

Of course there are geographical exceptions to the price you pay for quality.

Because income and sales prices are (for the most part) proportional, you won’t pay for a good meal in Mississippi as much as you pay in California. But the minimum wage per hour in Mississippi is $7.25 while it is $12 in California… So you see the proportion here right?

Just like you won’t pay for a seafood pasta in a hidden Trattoria of Venice Italy, as much as you will pay eating by a Canal at the so called TOURISTS TRAPS. But there is a reason for this too. Stay with me, you’ll understand why soon :).

COST OF LABOR

USA TODAY published an article on February 22, 2019 highlighting how the raise of minimum wage is affecting restaurants for the cost of labor.

They are forced to raise their prices to be able to pay (and have) employees and honestly, the wage increases are not beneficial when EVERYTHING ELSE ALSO GROWS, from groceries to bills, to dining out. I personally think it’s a tease and a way for tax collectors to…COLLECT HIGHER TAXES.

DINING SCENE IN LOS ANGELES

I live here. Everyone knows this is the one of the most expensive cities in the U.S.. Rent is unbearable for many and sales taxes are high. As customers, we tend to think that we are the only ones suffering from these expenses but restaurants, especially the privately owned ones, suffer from it too.

I have worked in the business for a while as a waitress, hostess and event coordinator, which gave me the chance to gain access to the knowledge of wholesale food and beverage prices, as well as to the costs a restaurant must sustain to deliver these goods to us.

One night a customer complained about being charged over $9 for a (large) bottle of water. A little later I had a long and in depth conversation with the owner, which totally opened my eyes to what goes on BEHIND THE SCENES, that I had never considered or that I had superficially guessed until that moment.

Certainly there are venues where you don’t get charged as much and still have a great experience but in this case I AM TALKING ABOUT A “WHITE TABLECLOTHS, ITALIAN, FULL BAR WITH 260 SEATING CAPACITY, kind of restaurant.

HOW MUCH DOES IT COST TO THIS RESTAURANT TO STAY IN BUSINESS?

I previously mentioned RENT. This one pays an average of $13.000 a month. I say average because their rent is a fix percentage of the gross income. Going back to the Venice example, I now understand that paying higher rent by the Canals compared to the ones inland results in higher prices and smaller portions.

ADDITIONAL COSTS ARE (average):

Light: $6000 a month

Gas: $2000 a month

Water: $2000 a month

Employees: average $20.000 or more a month + employees liability insurance + workers comp + all employees taxes.

JUST UP TO HERE THE EXPENSES ARE $43.000 MONTHLY!

TO ALL OF THE ABOVE ADD the expenses for food, imported goods, all beverage, tablecloths, liquor license, maintenance and POSSIBLY MAKE A BUCK FOR THEMSELVES…

RESPECTING THE BUSINESS

To furtherly highlight the unfair criticism, the owner mentioned the following episode.

He once needed a lawyer’s assistance for the business and consulted one that was a regular customer. The professional told him his fee was $700 per hour and that he would invest his time ONLY IF HE REALLY NEEDED HIM. Or, he could hand the case to a colleague who ONLY charges $400 an hour.

YOU ARE PROBABLY WONDERING WHAT IS THE POINT. Point is, the restaurateur MUST accept the price for a successful lawyer and respect the required fee BUT, the restaurateur cannot be respected for having to charge $9 for a bottled water.

Worse comes worse, the customer penalized the server for it…

So what I think is, we want to go to a classy restaurant, have quality food, have great service and a wonderful experience BUT we can’t accept the costs that come with all this?

MY CONCLUSIONS

Some people wants to be respected for their own business when it comes to MAKE the money but when it comes to PAY the money, they can’t respect someone else’s hard work and services.

On a personal note and how I approach “dining out”, if I don’t have money to spend I cook at home OR, because we all need outlets, I go where it’s most economical to go. But I get what I get in return. Most of the times.

What do you do?

Share the Love!

Leave a Reply

Your email address will not be published.