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Casual dining raises prices on the side

Casual dining raises prices on the side

BOSTON As casual-dining chains heavily promote traffic-driving, low-cost meal deals in the midst of a consumer spending slump, the average prices of dinner entrées, desserts and bar beverages have actually jumped this year, a new study released Wednesday said.

Intellaprice, a Boston-based restaurant pricing consulting firm, found that overall menu pricing at casual-dining restaurants fell 0.6 percent this year, but that prices of dinner entrées, desserts and bar drinks increased 2.2 percent, 7 percent and 1.7 percent, respectively, from the same time last year. The survey also found that the prices of side dishes rose about 8 percent. On the flip side, appetizer prices fell 2 percent in 2009, and the cost for add-ons, like cheese or extra proteins, declined 4 percent, the study found.

The firm’s 2009 study, in its third year, compares year-over-year menu pricing as of July, and covers 14 casual-dining chains in 21 markets nationwide. Intellaprice would not identify the chains included. It said it tracked nearly 2,900 beverages and 13,000 food prices in its sample. In 2008, the same study indicated that overall casual-dining menu prices had increased 2 percent and bar beverages rose 5 percent over pricing in 2007.

“What we’ve found this year … is that restaurants, knowing that their customers have become more price sensitive, have tapered off on increasing menu prices,” said Leslie Kerr, president of Intellaprice. “Obviously they still care about driving up their tickets, but they don’t want to be so blatant that people start to say they don’t want to eat out.”

She noted that chains are being more judicious with pricing changes, making certain that lower-priced deals — a near necessity in today’s market where consumers respond to lower prices — are offset by some higher priced items.

“[Operators] know it is a little more sensible to raise the price on dessert, which is not going to be a marquee item to a customer,” Kerr said. “[Operators] are going to look at a burger or sandwich or steak and make sure those prices are palatable.”

Kerr noted that even though many restaurant chains are advertising value-priced promotions, “Those [deals] are not the only things available to the consumer. [Operators] have to be very strategic or else they would lose margin.”

“They have to keep the customers coming through the doors,” she said. “That’s why they advertise their deals.”

The study also found that of the markets surveyed, Atlanta boasted the most expensive dinner entrées, averaging $14.75, outpacing prices in New York, Chicago and Los Angeles. Drink price trends showed New York offering the highest-priced beverages, followed by Washington, D.C. For example, a domestic beer costs on average about $4.15 in New York and $4.13 in Washington, D.C. Oklahoma City, where a domestic beer costs $3.22 on average, served the lowest priced drinks, the survey said.

Contact Elissa Elan at [email protected].

TAGS: Marketing News
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