Originally Posted by dan abnormal
I get tired of business owners whining that they would go out of business but charge triple what a meal would cost and lets not to mention drink cost. I dont mind a 5% tip but when the expect 1/5th of the bill is insane. ANd if I get answers like get your food yourself. Many times with the service I get like drink refills I wish I could and have. and just call my name and Ill go pick up my meals but regardless owners need to pay salaries not the customers
Again I feel like I have a terminal case of Devil's Advocacy, but wth, I'll roll with it...
What people with your view often fail to realize is that the costs of doing business, particularly in the food service business, are widespread, varied, and almost always grossly
underestimated by those without any experience with said business. In your example, the food product itself is probably a very small portion of the restaurant owner's overhead. By far he pays more for labor, benefits (to include mandatory payments to things like OASDI, workman's comp, unemployment, etc.), taxes, insurance, utilities, rent/lease/mortgage, permits & licenses, supplies, etc. than he does for his food. The only way to cover these costs is to factor them into his sale prices, and the only thing he sells (presumably) is food and drink. So yeah, the product cost is inevitably inflated. Plus he obviously needs to turn a profit, or why the hell is he busting his tail and going out on that limb to do it in the first place?
It's particularly brutal on the small business owner which is what you seem to refer to, but it's even true with the big "rich" chain operations. Take a McD's or an Outback Steakhouse, for instance. Each individual store likely makes a very very tiny profit per customer, sometimes they even lose money on some individual sales. But the difference is that the corporation as a whole makes a killing due due to the sheer volume of stores and customers they serve. The SBO that you describe doesn't have that volume to keep him afloat, his margins are so thin that there is truly a very fine line between maintaining a successful business, and total failure. His tolerance for variance, to use a poker term and to keep this somewhat topical , is exceedingly slim and vulnerable. He ultimately manages that with cashflow and market demand for his product. Raise prices and sure, he could make more per sale, but then he will inevitably lose sales. So he's constantly balancing prices to be fair to consumers and keep them coming in, while also maintaining his livelihood.
It's very easy for us as consumers, particularly those of us without business experience or training, to fixate on the disparity between the cost vs price of a product, while overlooking everything else. Apparently it's also easy for a lot of people to think that because a casino rakes in billions per year, that their lowly staff shares in this excess of wealth.