deceptive ordering

A soda in the store costs me $.25 a can. At $3.00 that's a 1200% mark up. How would you like it if they market up your bottle of wine 1200%? Beer? Would you pay $24 for a $2 bottle of beer? Would you pay $240 for a $20 bottle of wine? Yeah. Didn't think so.

I don't know where you're shopping, but most places (especially the independent places) a single can of soda is pushing closer and closer to a dollar.
That is, if we're talking about brands like Coca-Cola, Pepsi, etc.
Your Kroger and Wal-mart brand cans still are priced pretty low.

But even vending machines a can will run you 75 cents to a dollar nowadays.

If the food costs more, charge more for the food. If the problem is people drinking a gallon of soda, charge for refills (I drink one, MAYBE 2 glasses). Restaurants put in place bad policiies and are now punishing everyone for the sins of a few.

In my experience, those only drinking one or 2 glasses of soda are the few...most people drink insane amounts...

The price of everything is up these days. Don't act so shocked. Everyone on this board reads or listens to the news. I mean, my wife and I get close to the same thing every time we go grocery shopping, and in the last 2 months the average price has gone from $90 to $130. Food costs are up. Please don't act like our local restauranteurs are trying to gouge you.

And on the soda topic- There is no restaurant ANYWHERE making a killing on sodas. Seriously. And as for the lemonade, I'm sorry, but if you have an issue with the price DON'T ORDER IT. Make it at home, whatever, but don't make your own at the freaking table. It's so tacky.

Wow. Your theory : "No restaurant ANYWHERE making a killing on sodas".

Let's take a look.

Soda from a box costs about $1.00 a gallon. So even IF someone drinks a gallon of it. At $3.00. They make a killing.

Here are some industry average costs :

Alcoholic Beverage Costs
Liquor - 18% to 20% as a percentage of liquor sales
Bar consumables - 4% to 5% as a percentage of liquor sales
Bottled beer - 24% to 28% as a percentage of bottled beer sales
Draft beer - 15% to 18% as a percentage of draft beer sales.
Wine - 35% to 45% as a percentage of wine sales

Nonalcoholic Beverages Costs
Soft drinks (post-mix) - 10% to 15% as a percentage of soft drink sales.
Regular coffee - 15% to 20% as a percentage of regular coffee sales.
Specialty coffee - 12% to 18% as a percentage of specialty coffee sales.
Iced tea - 5% to 10% as a percentage of iced tea sales.

These numbers are costs as a percentage of sales. The rest is a thing we in business like to call profit. Yes, there is overhead, but still. 85-90% at the top line is doing pretty Ok I think. I'm happy with 15-20% on most of our product lines. Most companies would be. They'd call it a killing. A 2-liter in a store costs $2. A can is $.25. I can buy a gallon of tea for $1.00. That is packaged, labeled, shipped to the store and with everyone making a nice profit along the way. So $3.00 for a cup that is mostly ice anyway?

Many restaurants lose money on my purchase if I don't buy a drink. Every wonder why many coupons or deals say something like "buy one get one free meal with purchase of a large drink"? They make enough off the drink to cover the free meal.

So yeah, tell me to order water or price me out of the drink market. Yet another example of a bad business decision. (And a bad theory, BTW).

A soda in the store costs me $.25 a can. At $3.00 that's a 1200% mark up. How would you like it if they market up your bottle of wine 1200%? Beer? Would you pay $24 for a $2 bottle of beer? Would you pay $240 for a $20 bottle of wine? Yeah. Didn't think so.

I don't know where you're shopping, but most places (especially the independent places) a single can of soda is pushing closer and closer to a dollar.
That is, if we're talking about brands like Coca-Cola, Pepsi, etc.
Your Kroger and Wal-mart brand cans still are priced pretty low.

But even vending machines a can will run you 75 cents to a dollar nowadays.

Costco charges $9 for a 36 pack of Diet Dr. Pepper. You have to want to get ripped off pretty bad to pay $1 a 12oz can for soda. 24 oz bottles of Diet Pepsi are $1.50ish in most vending machines and quicky marts, but can be had for $.50 each in stores.

I never said vending machines were good deals. Is that where we are doing our price shopping these day? I hope not.

Almost every retail business does the same thing: loss leaders and profit makers. I stop at the Thornton's for gas. They don't make a lot of money off the gas, but they do kill me when I go in and get a 20 oz. Diet Mountain Dew (the nectar of the gods) for $1.59.

Grocery stores, discount stores, tire dealers, bike shops . . . just about everybody. I order water most of the time when I'm out. They lose money on that proposition. I've always assumed, though I don't know, that restaurants have a higher margin on appetizers and desserts. They price the main thing closer to cost, and extras have a higher margin. Makes perfect sense to me.

Charles

Charles, I completely agree. Which is why it makes no sense to price your profit leader so high that people stop buying it. Imagine if that Diet Mt. Dew was $4.59. You'd probably stop buying it and/or complaining.

Which was kind of my point.

Anyway... I think I've made my argument. Buy it or don't buy it. No need for me to keep going on.

End of rant / vent.

Chris,
I agree with your position about not ordering the soft drinks at $3. However, I was wondering where you got the $3 figure? I can't recall paying $3 for a soft drink anywhere. The local sit down places seem to charge around $2. Where are you going where they charge $3 for a soft drink?

Also, I would love to hear from some of our local restaurant proprieters that usually have pretty insightful posts in this forum for their opinions about how they arrive at the cost of soft drinks.

What most have failed to understand is that Costco, chains and other outlets receive discounts and percentage based incentives for volume ordering in which most independent restaurants do not receive that same benefit. It is not uncommon to see small business purchasing their foodstuff, like soda, from these outlets as it can be cheaper for them; plus no delivery charges. So if a small business orders a $1 soda they also are paying delivery and waste removal. This is the reason everyone starting selling water in restaurants. To get you to pay for water which is not free. In some drought stricken cities you will pay for tap water which I feel should be the standard. People pay for tap water at home then why shouldn't you pay for it at a restaurant.

As far as profit, soda on average is not profitable since the price of corn has risen. We have seen margins in that area fall 75%. Most people are asking for soda companies to return to sugar based drinks however with the major fire at the Dixie plant it will not happend for a few years or we will have to import more sugar to do so. Also it is not only the soda that is costing more, it is packaging. We have seen prices in plastic products rise 40% in 6months. Even the fountain drinks cost because the business is paying for syrup and water plus packaging. Unless you have incentives in place it can become a break even position very quickly.

we charge $1.50 for soda and tea at the CPC
and the highest i've seen is $2.59 at a chain "mexican" restaurant

i'd say $2 is standard around louisville

I'll take a glass of water, some free slices of lemon, and 10 packets on free sugar...

Prices.....Everything coming through the back door at every restaurant is up almost 20%.........Everyone going out for dinner or entertainment need to realize independents need to charge a fair price...if its $3.00 for a soft drink or $30.00 for a great meal.....Support the independents

Pricing fountain beverages has always been kind of a "go with the flow" procedure for me. "What is everyone else charging?" Then set the price either at that mark or a bit lower. If we charged a "fair" mark-up on sodas they would be dirt cheap, but a lot of restaurants use fountain drinks as a way to get back a little on higher food cost entrees and hope it all evens out in the long run.

I remember when we increased the fountain price from $1.50 to $2, the big question was "would they pay this much for a drink?" And we watched fountain sales very closely for the next six months. Honestly, there was an initial drop-off in fountain sales for the first couple of months after the increase, but eventually it became the normal price and it stabilized. That said it stabilized at a lower percentage than before the increase...

It seems to me there are quite a few hidden costs in supplying a fountain drink. (or tap and bottled water.)

Consider the initial cost and maintenance of a commercial ice machine, a heavy metal rack to hold the boxes of syrups or mixes, and running long lines to the dispenser. Also, there are costs of buying and cleaning hundreds of glasses (minus breakage and other "shrinkage"). Even if cans of bottles are sold there is a large commercial display refrigerator required to keep them cold and usually glasses are also supplied.
These depreciation on these items may be averaged over many months but they are still legitimate costs.

Other costs that we do not have at home: employee wages and taxes, state/local permits and licensing, increased insurance, utilities and equipment, fuel surcharges from vendors, commercial building maintenance and emergency repairs, occasional vandalism and thefts, and other increased costs of doing business that can't always be passed on to the customer. (Of course, some of this includes pricing of food as well.)

Ever consider no one is directly charged for using the condiments on the table or paper products in the restroom?
How about the costs of maintaining landscaping and parking lots? (except in a few downtown locations, of course.)

Hardly the same costs as picking up a warm case of sodas (or water) at a warehouse store for personal use.

Probably another reason I'm not in the biz, I would NOT have fountain drinks.

Something else those of you not in the Bizz need to be made aware of is the ever popular
"Fuel Surcharge" that some distributors have started...

What REALLY makes me mad about this is that I can't "Write this off"... For example...

If I order say xxxxx.xx a week in groceries and they tack on xx.xx in fuel surcharges then at the end of the year If I have 2 deliveries a week and each truck costs $xx.xx; Where do I put that in terms of figuring my actual food cost?....
It's not like this is an item that I can count in my inventory(I work on a yearly budget that was approved by committee and there is no allowance for this). I have to absorb this into my food cost even though I have no choice but to have this stuff delivered.

At the end of the quarter that means I have spent $xxxx.xx on just getting the delivery to show up! In the grand scheme of things it may seem insignificant to you, to person who feels that they are getting "gouged" for paying $3.00 for a bottomless soda but these are real dollars being spent that have to be made up!

..to person who feels that they are getting "gouged" for paying $3.00 for a bottomless soda but these are real dollars being spent that have to be made up!

You hit the crux of my concerns with your word "bottomless". Why should those of us who only drink one are two glasses of iced tea be forced to supplement those who drink a gallon? Why not price drinks by the glass like you do other menu items? We don't get unlimited salads, steaks, desserts etc. unless we're willing to pay extra to go to a buffet and have that privilege so why are drinks in most restaurants provided that way?

Or worse yet why is the price of iced tea and coffee the same as that for soft drinks since I'm sure soft drinks are a lot more expensive to provide than iced tea or coffee? It's kind of like pricing a chicken breast the same as a lobster tail.