Caterer - August 2005 -Pricing

Pricing can seem like a bit of a minefield for many restaurateurs, with many different factors to think about. However for the sake of this article I won’t dwell on the financial considerations regarding pricing but instead give a marketing perspective on setting the right price to maximize custom to your restaurant.

If you are debating whether to higher prices or not I would recommend you set the prices in the higher bracket for the a la carte menu. This will enable to you to adapt a kind of pricing policy that is used so effectively in the low cost airline industry. By this I mean matching prices to demand. The busiest times of the week for the vast majority of restaurants will be between 7pm to 10pm on Fridays and Saturdays, during this period the a la carte menu should be in effect and nothing else. For other times of the day and week you will be able to offer more value for money and in so doing increase the number of covets. Many restaurants can achieve excellent sales figures at traditionally slow periods by, for example, having a cheaper pre theatre menu available between 5pm and 7pm and a post theatre menu after 10pm (customers don’t necessarily have to be going to the theatre to get the menu!). Further promotions on the same theme and at the same time of 5pm to 7pm could include a Senior Citizens menu or a Students menu depending on the demographics of your area. Restaurants that don’t have a large local population of senior citizens or students could instead have an ‘early bird’ menu open to everyone. The simplest way of doing a price promotion would be to discount the normal menu by 20% between 5pm and 7pm during the week.

A specials menu can also be offered along side the a la carte menu with the exception of your busy Friday and Saturday nights. Having a few other menus may seem a bit daunting, but they should only be slight variations on the a la carte menu with smaller portions.

A higher priced a la carte menu means that you can also be more flexible with giving discounts to certain groups. For example as part of your marketing mix you may wish to offer a 10% discount to a local large employer, members of a local gym or staff from a local hospital. The organisations that this discount is available to will be more than happy to promote the offer and the restaurant to their staff as it means extra value to their customers or a nice little perk for workers of a particular organisation.

Furthermore there are a few good restaurant booking companies that charge a commission per person for everyone that they bring into your restaurant.

One last word on pricing, higher prices do mean that there will be an expectation of higher standards. If your restaurant fails to deliver customer expectations it will obviously result in a worse reputation than if the prices were lower.

So in conclusion pricing your food and drink should not be thought of as something static as being willing and able to change prices to suit different times and target markets will greatly improve your popularity and therefore your profitability.

Article supplied by Guy Holmes from Captivate Restaurants.