Establishing the pricing on a restaurant menu can be a tricky affair. Dishes deemed too expensive will drive diners away, but the opposite is true as well. At the Culinary Institute of America in Hyde Park, N.Y., professor Ezra Eichelberger tells his students about a California restaurateur who had great food but few diners.
"He would see people read the menu outside the door and walk away," he recalls. "One time, when he eavesdropped, he heard folks say that while the dishes looked good, the prices were too low. In the end, he had to raise prices to attract diners."
Eichelberger teaches his students to cost out the dish and multiply it by three to obtain a selling price for most entrées. If that price seems too high, then raise or lower it depending on the amount of labor required to make the dish.
"A seafood ravioli, for example, is more labor intensive than broiling, sautéing or grilling, so you could price it a bit higher," he suggests. "Pricing is not an exact science because there's so much more involved besides the actual product."
Inappropriate pricing is one of the biggest mistakes Leonard Jackson sees on menus.
"It's one of the reasons there's such a high failure rate in the restaurant business," says the director of hotel finance and investment at Georgia State University's School of Hospitality Administration. "I see restaurateurs underprice their food all the time and follow the market leader, not realizing that the larger restaurants they are following can absorb the lower costs, but that they themselves cannot," he says.
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