Ten Rules for Better Pricing
Transparency is the word of the day. So as a supplement to my Real Cost Dining Index published on Bloomberg.com today, here are ten suggestions that restaurants, particularly tasting-menu joints, can adopt to give diners a better idea of how much money they’ll spend.
- Adopt “Real Cost” Pricing: Call up The Inn at Little Washington in Virginia and a receptionist will tell you “the price of dinner is $405 per couple after tax & tip but before wine.” Sure it’s a scarier number than $158 per person, but it’s a more realistic number. That fortuitous phone conversation I had with “Little Washington” was the inspiration for today’s Bloomberg Column. Real cost pricing wouldn’t work for most restaurants with their infinite a la carte menus, but it would be ideal for Masa or Gordon Ramsay, which offer fewer choices.
- Include Prices for Online Wine Menus: Momofuku Ko fails to publish wine prices online. Wouldn’t guests like to know that Ko’s beverage pairing is $95? That’s 75% of the cost of the full, $125 dinner menu. Wine can easily cost more than food at Le Bernardin, Jean Georges or Marea, but none of them publish an online list. If a $190 tasting menu isn’t really an impulse buy, neither is a $3,000 bottle of Krug Champagne.
- Increase Prices at Regular Intervals: I’m rarely upset when I purchase an Apple product because I know new iPhones and MacBooks come out in the summer/fall, and new iPads come out in the winter/spring. Just the same, Per Sehas a habit of increasing its prices in the new year, so I know to eat there in December to save a few bucks (though I’m happy to splurge on a summer menu too, knowing it might be pricier a year later). Predictability helps consumers spend their scare resources more efficiently.
- Announce Prices During Reservations Process: Call up Bouley and they take your name and that’s it. Wouldn’t it be nice to know the price is $50 higher than a few months ago? So you’ll show up and spend $100 more per couple. NOT COOL. Call up Stone Barns and even if you’re making your fifth visit the reservationist tells you how much the menus cost, so you’ll realize that prices have edged up a bit. COOL.
- Include Prices on Online Food Menus: I have no idea how much dinner at L’Atelier de Joel Robuchon in Midtown will cost because there are no online prices on the Four Seasons website, on the Robuchon website, onOpentable.com or on Menupages.com. That takes chutzpah for a venue where tasting menus for two with pairings will cost over $700 after tax and tip.
- Publish Market Prices: Don’t make me ask how much the Dover Sole costs. Put the price right there on the menu; after all you’re printing your menu every day. Don’t embarrass me when I have to inquire about the cost publicly at the table and I learn that I can’t afford it.
- Give Advance Notice: Drew Nieporent and Paul Liebrandt are giving diners a full month to dine at Corton at $99 before the price goes up to $115. Sure, there are good business reasons not to give advance notice of price hikes (i.e. skewing demand at “sale” prices), but from a consumer perspective, advance notice is PRETTY COOL.
- Get Ahead of the Inflation Curve: Food prices will go up for the rest of our lives. We get it. So think like an economist and raise your steaks $15 bucks now and get ahead of the inflation curve, instead of hiking them by $2-$5 every few months like Minetta and The Lion. Stable prices will make restaurants more money by winning the loyalty of consumers who are more confident about the purchasing power of their dollars. Volatile prices leave consumers wondering whether the ribeye will cost more after making a reservation, so they’ll end up eating elsewhere.
- No Jigsaw Puzzle Pairing Prices: As I note in my column, would you walk into a restaurant and order a beverage pairing without food? Of course not. That’s whyLe Bernardin deserves credit for listing the paired tasting at $330, instead of $190 food and $140 for wine. Other restaurants like Eleven Madison Park, which lists its wine pairings separately (as a $145 supplement to the $195 menu) should adopt Le Bernardin’s more transparent policy.
- Build Service Charge Into Prices: I’m likely alone on this one, but here’s what I do know: Per Se's prices, which include service, more accurately reflect what you'll end up paying than the prices at probably any other restaurant in New York. So putting arguments about mandatory gratuity aside, the following is indisputable: Per Se's prices are simply more transparent to the consumer. THAT'S COOL.