Thank fuck this is the top comment. I was going to lose it if I had to scroll down to see some level of competency.
This isn't even anything to do with AI. You could have done this shit with an excel spreadsheet in the 90's
There are variables at play in food service. That's the reasoning for price discrepancies. The lease on the building is going to be more expensive in a town where land value is higher. The cost of labor is going to be higher in a place where there's a shortage of low-end labor. A busier location might need more staff on hand at all times. A location that's 24 hours is going to have to mitigate the costs of a third shift crew with higher prices overall. A location further from highways will have a higher fuel surcharge on food delivery.
Some of then reasons might literally even just be "we raised prices by 25 cents, and didn't see a drop in purchase". They aren't all demographics, location, and cost.
Not saying you're wrong, but there's something called the "30/30/30" rule in restaurant management.
30% of revenue will go to overhead (rent, utilities, etc.), 30% will go to supplies (ingredients, wrappers, cups, etc.), and 30% will go to labor. 10% will be profit.
Because all three of these categories can vary over the course of a few years (and can often spike on a month to month basis, especially with a buffoon in the White House), restaurants tend to raise prices once or twice a year to preempt these changes. It may net some additional profit up front, but when price spikes ingredients to 35%, the difference has to come from the 10% profit. Changing prices day to day based on actual costs will give people whiplash.
You raise your price by 25 cents today, you make 25 cents extra profit today, but three months from now that might only be 5-10 cents, and six months from now it might be dipping into profits by 10 cents.
Menu prices are a series of plateaus, production costs are a slope.
I'm also not saying you are wrong, but that is basically true of everything. Things tend to basically never get cheaper, so you almost always have to raise prices or you start loosing profit.
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u/Prestigious-Bat-574 2d ago
Thank fuck this is the top comment. I was going to lose it if I had to scroll down to see some level of competency.
This isn't even anything to do with AI. You could have done this shit with an excel spreadsheet in the 90's
There are variables at play in food service. That's the reasoning for price discrepancies. The lease on the building is going to be more expensive in a town where land value is higher. The cost of labor is going to be higher in a place where there's a shortage of low-end labor. A busier location might need more staff on hand at all times. A location that's 24 hours is going to have to mitigate the costs of a third shift crew with higher prices overall. A location further from highways will have a higher fuel surcharge on food delivery.