Restaurants have notoriously low profit margins. Not every restaurant of course, but there’s a reason that restaurants regularly fail, especially in cities, and I don’t think it’s because the owners are spending it all on yachts.
Not every restaurant of course, but there’s a reason that restaurants regularly fail, especially in cities, and I don’t think it’s because the owners are spending it all on yachts.
I think a lot of them are in debt up to their eyeballs and that’s why they fail. They also usually make up for the lower margins on food with better margins on drinks, but there’s a margin on every item regardless.
Rent is also a factor. Commercial real estate is not cheap.
And some just plain suck. The food sucks, the prices suck, the service sucks, or the location sucks.
There are myriad reasons why restaurants fail, and I doubt it’s all because of low margins.
I’m not an economist, but whlouldnt manipulated prices drive things more toward fair market value?
A crusty menu meant to last a year is more likely to overshoot prices to cover market fluctuations that occur during that year. At least this is how I think of it.
Other than gasoline and expensive fish, we don’t really pay true market price for anything. That would be chaos and I’m not sure why any consumer would want prices to fluctuate that often.
If anything they will use corrections to drive the price up, not down. The only way prices would come down is pressure from competition, without that a reduction in business costs would just mean more margin for the owner.
Alternatively, they could stop manipulating their prices so much.
Restaurants have notoriously low profit margins. Not every restaurant of course, but there’s a reason that restaurants regularly fail, especially in cities, and I don’t think it’s because the owners are spending it all on yachts.
I think a lot of them are in debt up to their eyeballs and that’s why they fail. They also usually make up for the lower margins on food with better margins on drinks, but there’s a margin on every item regardless.
Rent is also a factor. Commercial real estate is not cheap.
And some just plain suck. The food sucks, the prices suck, the service sucks, or the location sucks.
There are myriad reasons why restaurants fail, and I doubt it’s all because of low margins.
I’m not an economist, but whlouldnt manipulated prices drive things more toward fair market value? A crusty menu meant to last a year is more likely to overshoot prices to cover market fluctuations that occur during that year. At least this is how I think of it.
Other than gasoline and expensive fish, we don’t really pay true market price for anything. That would be chaos and I’m not sure why any consumer would want prices to fluctuate that often.
If anything they will use corrections to drive the price up, not down. The only way prices would come down is pressure from competition, without that a reduction in business costs would just mean more margin for the owner.