Don’t Trust a Chef and a GP Calculator to Price Your Menu5th January 2018
Put the GP calculator away for a minute yeah? I’ve got a ballad to share.
‘Recruiting a Head Chef.’ Ahem.
Trawling through CVs,
And desperately avoid agency fees,
Dosage of caffeine,
Taking a coffee into every single interview coz you’re super keen.
And you did all that so that you could do less, not more. You DEFINITELY didn’t bring in a Head Chef to tell them how to cook (Gav, mate, your baked egg recipe is delicious but sit the fuck down now please). So why – you bastard – are you telling me to take some of this work back? A laborious bit of work at that.
Let’s Look At This a Little Differently
The reason that chef’s regularly set menu prices is because they know the cost of the produce, right? Who better to figure out the nuanced complexities of seasonal ingredient pricing, hourly labour costs and cooking consistencies than the lady or gent that manages every square inch of activity behind the pass?
Except, that’s not what product pricing is about. If it were, then your new kicks would set you back about £12. And you could probably get a train from London to Lincoln for about half that (£80…a single is 80 shitting quid…)
Put the GP calculator away. Pricing is not an equation. It’s not even about supply and demand.
Disclaimer: If you know a Revenue Manager (or worse, you are one), then you’re probably hollering wildly at your screen right about now. “But…but…ADR and….RevPAR…and forecasting…and….sit down with Gav. Now please.
Let Me Explain
Pricing is not a singular exercise in ‘what can we get away with.’ It’s a rather large part of branding, marketing and the customer experience you offer: A £40 steak better taste amazing. A £10 equivalent only needs to be cooked and come on a plate.
Price sets expectations: £10 really isn’t much for that steak. But £10 for a sandwich is kinda crazy, irrespective of what’s in it.
Price is set by the market, not solely by supply & demand: A £4 sandwich might be fine. Unless the place next door is selling them for £3.
Price differentiates from competitors: Your sandwiches might only be £3, but people come to you for coffee and you charge £5 per cup for it, that sandwich isn’t going to help much (you might not want to charge for coffee at all…)
Price matters more on products customers use you for: Where’s that button on the GP calculator again?
You Get the Drill
So, let’s get back to basics: Who is the best person in your business to set your menu pricing? Is it the person that knows what the competitors are up to, understands the entire customer journey and their general likes & dislikes, and is responsible for the broader marketing strategy?
You’re god damn right.