Restaurant prices are just ludicrous

[Mummyhokey]

I know that this is hardly breaking news, but seriously what the actual fuck is going on with prices in restaurants?

Went out to a High Street chain restaurant last night for DD’s birthday. So whilst the food was cooked fresh on site there was absolutely no local chef input into the menu etc. There were also only two waiting staff working a busy place so the service was slow even though they were doing their best.

The cost of the meals was, in my opinion, completely unrealistic in terms of what we were getting. Little change from £20 for a basic burger or chicken dish. Another fiver for a side order. So for the four of us, £100 gets us one course each. Drinks on top, £3.95 for a glass of watered down Diet Coke. Twice that for a beer. £6 for a slice of cake for dessert.

This seems typical now for restaurants. It’s just totally unaffordable for most families to do this more than very occasionally, surely? I get that utilities and wages have gone up, as have the cost of ingredients. But have they gone up by that much? The increases seem outrageous. That slice of cake works out at about £50 for the entire cake. I could buy the ingredients for that burger for well under a fiver.

And then the 12.5% optional service charge added to the bill so that the options are ‘Pay it’ or ‘Ask for it to be removed and feel like a dick for doing so’.

No offence to hospitality business owners or the people working in them, but this just can’t be sustainable surely?

Ok. I own a restaurant.
Firstly, that price will include 20% VAT. It’s very unlikely that the place you went to isn’t VAT registered so 20% of what you paid goes to HMRC.
Then the restaurant has to factor in the cost of rent, business rates, water and sewage, staff pay, NI contributions, pension contributions, holiday pay, electricity, insurance, pest control, waste disposal, glass recycling, all the crockery and glasses you use and their replacement when they get broken, toilet roll in the loos, soap in the loos, repairs to fridges and dishwashers, fire alarm and extinguisher maintenance, if they play background music a PPLPRS licence….I could go on.
We are a busy restaurant. On the face of it you’d look at us and think we’re raking it in but the reality is we just about manage to cover our costs and pay ourselves much less than you’d think.
If you think it’s expensive to eat out you should try owning a hospitality business.

English seaside town, yesterday I bought two standard size bags of chips, couldn't believe it came to £7.

Agree with this. When our kids were little, ten or so years ago, we could afford to go to places like Pizza Express reasonably regularly because it was good value. I never go to places like that anymore- I’d rather spend a bit more for a really good meal made by a decent chef, with fresh, local ingredients. But overall we eat out far less often than we used to.

Like a PP, it reminds me of when I was a child in the 80s and early 90s- our family and most families I knew very rarely went to restaurants- it was a special occasion thing, like a big birthday.

it is the price of things. Plus all the staff are probably on shit wages, so you are lucky it's not more.

I see a lot of moaning that it is pricing people out of eating out. Well, maybe. But that is what luxury things do: they are expensive and only people who can afford the expense use them.

I don't eat out unless I'm away from home and there is no alternative. It's far too expensive for what you get. I could afford to if I wanted to, but I don't see it as value for money.

I do think a lot of restaurants rely on people eating out because they're working away from home and claiming expenses from work, rather than families. It's a more reliable market.

I grew up in the 70s. No working class person I knew ever ate out unless it was a big occasion.

I noted this, this week when I took my elderly Father out for coffee and cake. Both the coffee and the cake have gone through the £4 barrier.
The cake was cut very thinly and hardly worth the effort. I sat and thought that hard up pensioners are even being priced out of this treat. I am sure the owner needs to charge these amounts to cover rising costs, but soon only the wealthy will be enjoying such treats.

I think you are spectacularly missing the point OP. They are running a restaurant, a business, and need to make money. They have all their overheads to meet, staff to pay and it's not just the cost of the food. Utilities have gone up and the cost of food has gone up too. It's not comparable to eating at home and if you were to accurately cost that out, it would be more than the raw ingredients.

My issue with eating out in the UK is that often the quality is poor, but that's probably related to customers only being prepared to pay a certain amount as well as the businesses needing a margin. Also, jobs in hospitality are not seen as a career which means the level of professionalism is not great. You only have to see how many professional chefs can't make their own award-winning restaurants pay and go bust.

This is spades.
Especially the fact that 20% of the cost goes to HMRC.

I get it. When I mentioned the cost of ingredients in an earlier post I obviously didn’t think that ingredients are the only cost that a restaurant has.
My point is that restaurants are now so expensive that they have become unsustainable. I don’t think owners are getting rich off the back of them (apart from maybe the private equity people buying chains).
The product (food + service + ambience + experience) just doesn’t match the price. I know that’s because all the elements necessary to run a restaurant have gone up in cost, but that doesn’t change the fundamentals. Those things have conspired to mean that restaurants don’t work any more, so supply will outstrip demand and many will close.

I know that key to running a successful business is not charging so much that your customers can’t afford your product.

As another poster has pointed out, the profit margins are relatively low. Recent price increases are down to increases in overheads and tax. The hospitality sector is struggling. They’re not putting up their prices for the fun of it. They know that increased prices means fewer customers. They’re increasing prices to try to mitigate the huge increase in the cost of overheads and tax.

But surely restaurants have always paid VAT (well, for as long as VAT has existed). As prices go up, the amount of VAT goes up but proportionately the rate has stayed the same. No?

I feel the same way. We went to a pub the other day, 2 adults, 3 kids, all had a main cause, kids had a scoop of ice cream. Husband had 2 beers, I wasn’t drinking - £120. Eating out is a rare treat for us now. In my head that meal should cost about £75!

While in Scotland we went to a shipping container outside St Andrews (refurb - but only for staff),
no toilets, outdoor seating (no heating for customers), and the cost of 3 main tacos, 2 sides, 3 drinks came to £40.

Going to chain restaurants is literally the worst value for money and always has been.

We had 2 delicious main meals and a pint and a half of lager for £50 in an independent pub a couple of weeks ago. Nice place, good service and lovely food.

No, I’m not missing the point. I understand that restaurants exist to make profits for their owners. My point is that the business model has become unsustainable when the only way to attempt to make those profits is by pricing meals at a level unaffordable to customers. Those customers won’t just pay more, they will stop going to the restaurants.

I imagine over time a lot will just close down like a lot of the shops

Rates are £££££ now too

Maybe we have different views on what constitutes good value for money, but £50 for that seems at least £10 too high to me. It’s £25 for a meal and a drink!

I do agree. It is depressing.

Look at how many pubs have closed, more restaurants will just close.

I don't mind the prices for a treat, but I do mind that the food quality is usually rubbish. I resent paying for food worse than I can make myself. I don't eat out much now!

I go to local places rather than chains.
i would be sad if they had to close so I give them my business when I can

Looks like things are going full circle. Growing up, going to a restaurant was a special treat rather than a regular occurrence. Both my parents worked, but they could only afford to splash out on rare occasions. With all the other things currently brewing, it's all getting a bit 1970s.

I think part of it is that as prices go up, and quality goes down restaurants get fewer customers which means they put the prices up further to cover their fixed costs which means they’re even worse value for money. To use Pizza Hut, they used to offer cheap and cheerful pizza - good for a bite to eat before the cinema or for an easy lunch. Our local one used to be packed out.

The last time I was there the place was practically empty, prices had pretty much doubled and the quality was terrible. I get they need to cover their costs but if the product is poor and expensive people go elsewhere. By contrast the local Italian offers a very reasonable, good quality lunch and is packed out. People then book for the more expensive evening service (more costly but also good value) because they’re even worse know the good and service are excellent. Which one is more profitable?

Agree. We don’t eat out now and haven’t for well over a year, probably 2 years. Even the naice places haven’t been as good as the food I can make at home.

The last time we had fish and chips (2adults 2 children) there wasn’t much change out of £50 - never again.

We can afford to eat out but I’m not spending my money on a piss take.