The restaurants we love, we love for the entire experience, and price is part of that experience. Even for people who can happily afford the higher price, it still results in a different experience. The people around you in the restaurant will be different. Your perception of the value of the meal will be different. Your willingness to try more adventurous items on the menu will be different. The whole thing is not just quantitatively different, but qualitatively different.
A $20 burger is not a $10 burger, regardless of how the two are prepared. If the former is not the experience the chef wants to create for their customers then, no, just raising prices doesn't "solve" the problem.
Raising prices sounds like the best strategy. You keep raising until the workload returns to normal. If you feel you're serving the wrong customers, you now have time to figure out how to fix that. Otherwise, if people eventually get turned off by the price and your workload goes down, you drop the price, and keep dropping it until you reach a stable point with just the right amount of orders.
And as the original commenter noted, you could put coupons in the local newspaper and the library and whatever else, so the locals have access to burgers at the old price.
Ask any family restaurant/bar owner in a seasonal tourist destination and they’ll explain why locals must be one of the first considerations before you make drastic changes. Particularly if an important reason for opening was a personal preference to serve locals over tourists in the first place.
It’s incredibly interesting to see how few people understand that someone may open a business with priorities other than massive growth potential.
It really is interesting, but hardly surprising, given the demographics of this forum. :)
Several of the local places do "frequent diner/visitor" loyalty cards, where the 5th or 9th meal (for restaurants), coffee (coffee shops), etc are free. This offsets the otherwise high prices charged on menu items.
Also, once a year (during the off season, of course), the local high school sells a booster card that gets a percent discount off for the entire year at numerous local places.
This is of course not unique to a touristy area, but I find myself using them far more often than in other places I've lived.
Any person travelling just coming by for the "best burger" probably would not want to spend $34 and not use that card anymore so $20 sounds great. Any regular would probably be super cool with paying that extra $30 knowing they can get a burger once a week or whatever for $4. This works out for the restaurant and the regulars, and like you said they can just hand out those cards to anyone for any reason.
Plus having special cards feels corporate, not homey. Looking at an ID for locals discount is pretty well trodden ground.
There are already markets for fake IDs, so unless you're suggesting that small local restaurants purchase scanners to confirm the authenticity of each ID, it would be relatively easy to circumvent this check too. (Some states require IDs to be scanned for selling alcohol, but many, e.g. in Oregon, do not, and the only check is some employee looking at a card in their hands for a couple of seconds)
> Plus having special cards feels corporate
Not at all. Plenty of local restaurants in my are (Portland, OR) have rewards cards, where you get stamps and a free meal after some amount of stamps.
It's possible there was something he could have done to make things good again... if he wasn't too burned out by the experience to figure it out and carry it out.
At best, it can be a target of a GoFundMe or something - but that's just to pay operating costs. The store itself has to operate like a normal capitalist store for the concept to work, accepting customers, charging money, etc. There is no concept in our society of a non-profit burger joint.
To give an example, charge exorbitant prices for burgers knowing there are still people desperate enough to try the burger that paying $30 is fine and then use the extra revenue to give back to the community, possibly by paying for the local soccer club to get a new clubhouse, or possibly by providing free/subsidized burgers at local events where the crowd will be local. In this way the business stays open and isn't overwhelmed by the demand, while not completely isolating itself from the local community that the owner wants to give back to.
Sure you won't necessarily meet demand, but there's no inherent reason quality need suffer(?).
Or, have a coop where staff wages soak up all excess revenue, giving zero profit.
You'd want a contingency, and a savings account if you seek to expand the business, but they're not profit.
We could do that with all businesses I think.
Maybe a better approach would be to jack prices up sky high for tourists and open another burger joint with a different name for locals.
If you’re a restaurateur, you probably don’t even live near that restaurant. But this advice is tantamount to: tell your friends and everyone who helped you get where you are that they’re too poor for you, now.
edit: To give another example, I have a kebab shop in my neighborhood who will not take any orders by phone let alone online. They dont have flyers or a web presence. Its a small street faced window run by an immigrant family who keeps the booth open throughout the day, from 11 to 11 longer or shorter depending on when they are out for the day. Most of the time the place is empty but during mealtimes there is regularly a line for half an hour. For the area, this is extremely well. And they sit right next to two other kebab shops, a pizza place and two asian places with mostly no line, literally the street down in 3 minute walking distance.
The reasonable thing would be to close the shop in the afternoon and take orders in advance, but thats not what they want for their shop. They want to talk and be a place where people meet, despite them not having any tables and not serving any drinks except a tea on the house from time to time.
And their food is absolutely amazing. Home made sauce and bread, it is worth the wait or to eat at 4pm in the afternoon. They dont let them self get rushed and it is always an amazing meal.
At the point where you're running 20 tables or more for three rounds every night (plus mabybe 2x lunch) you stop caring about making more money. Because if money were that important, you would have gone into investment banker, not chef.
Plus restaurants tend to get into and out of favour. IT'
And everyone hates tourist. Seriously: if you work anywhere close to tourists, you will hate work because it's full of tourists. Then you take a vacation and start hating yourself.
The whole idea is that non-locals are probably going to buy 1 burger per year or perhaps lifetime.
These kind of people don't fiddle with ebay and paying a random guy just to get 25% off of a burger that they will use once.
Someone that is only going to go there once or twice? Then it won't cause a problem.
Someone that isn't a local, but goes to the place over and over anyway? Consider them an honorary local.
Get creative you're now a destination restaurant and can charge $50+ a burger. Or go out of business I guess.
Imagine you were taking a trip to Dallas. You're taking PTO, paying for flight/hotel, and so on.
Are you really going to waste time buying a local's 30% off card on ebay that you will use once a year? Maybe once in your life? No way.
Even if you did, what is the result? A handful of people hustled you for a few bucks, but still generated profit for your restaurant.
Presumably it would also expire, so it would be that locals loss rather than the restaurants.
The food was merely okay. The story was that it was cheap and decent, not good. But as I stood looking at the staff I couldn't help thinking that it would be better for everyone if they raised their prices $2 a plate and just slowed down.
No matter how stupid, the jump by 50cent to 6€ gets me every time. It makes no sense, but I start to calculate what I could get instead on the cheap end. Breakfast to go is the same with 3€ to 3,5€ to 4€. I mean could get a portion of fried rice for 4€! Same goes for pizza or any number of take away items.
It doesnt help that most shop owners arent stupid and optimized for those thresholds.
And then, in a quieter voice, he started to explain why it wasn’t just two weeks. He asked me not to reveal the details of that story, but I can say that there were personal problems, the type of serious things that can happen with any family, and would’ve happened regardless of how crowded Stanich’s was
P.S. And then when the next "top N burger joints in America" list comes out that everyone goes crazy for and all the burger-tourists start going somewhere else now you've lost your local customer base and you might go out of business regardless. Raising prices works well if you're a fine dining establishment in a dense metro area and that's the kind of business you expect to run. It doesn't work so well for burger joints or BBQ shacks elevated to a bizarre level of temporary fame.
Then lower your prices again to match demand. It's almost as if prices aren't set in stone.
I seriously doubt it. Do you have any empirical evidence for this?
Maybe you truly can do that, but it is not easy.
Did they really make the place successful though? I don't see what exactly they contributed to the business. Had the locals not liked the food they probably would never have returned and would have also told all their friends never to go there.
Your old customer base was hopefully working, but your new customers expect the words greatest burger. Can you deliver on that hype?
The owner above payed month of utilities for an empty restaurant and has to make a sizeable investment to cater to that new customerbase.
Unless you didnt have a functioning business model beforehand, this is a real curse and puts your livelihood at stakes.
If I were Stanich, I would raise the prices but also offer reusable vouchers/coupons to all past customers, friends, and family so they can pay the original prices.
I can guarantee you there are famous NYC restaurants in my neighborhood where I can get a table even if there are lines out the door or reservations are completely full.
You just have to live in the neighborhood and actually put some effort forth to introduce yourself to staff and maybe go occasionally when you know it will be slow (like during a snowstorm or holiday). It does require a good manager/host though.
If you look at the best restaurants in America like the French Laundry in Napa, they charge astronomical ridiculous prices and they still have reservations for months ahead of time. The oldest restaurant in Paris requires you put down a 400 euro deposit just to make a reservation! That these burger joint owners shut down instead of raising prices seems like a huge business mistake. They could have put 50% off coupons in the local newspaper or something if they wanted to make the place available to locals at reasonable prices.
[1] https://a16z.com/2016/08/13/pricing/