Repricing the Prix Fixe
A 90-seat restaurant runs a three-course prix fixe at $48. Food cost has drifted to 34% against a 30% target. The chef's costing sheet prices each dish on its plated portion only. Investigation shows: (1) the menu's signature short rib yields 62% after trim and shrinkage, but is costed at raw purchase weight; (2) bread service and an amuse-bouche are uncosted; (3) the dessert course uses a costly imported chocolate; (4) portioning is eyeballed, and plate waste on the short rib runs high. Sales mix is stable; the short rib is ordered by 70% of guests. The owner wants to raise the price to $52. The chef wants to cut the short rib portion.
1. Recost the short rib correctly and explain how the yield error changes the decision.
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The error: costing at raw purchase weight understates the true plate cost. If the raw short rib costs, say, $10/kg and the plated portion is 200 g, the naive cost is $2.00. But at 62% yield, 200 g of servable meat requires 200 / 0.62 ≈ 323 g of raw product, so the true cost is about $3.23 - roughly 60% higher.
Why it matters: the short rib is ordered by 70% of guests, so this understatement dominates the whole menu's food cost. The apparent 34% is probably worse than the sheet shows once trim, shrinkage, bread, and the amuse are costed. Correcting the yield alone may account for most of the 4-point gap.
Implication for the decision: the chef's instinct to cut the portion attacks the symptom on the highest-volume item, which guests will notice most. Before cutting portion or raising price, fix the costing method: cost every dish on as-served yield, include bread and amuse in the menu cost, and price the dessert on actual ingredient cost. You cannot choose between price increase and portion cut until the true cost per cover is known.
2. The owner proposes $52; the chef proposes a smaller short rib. Recommend an approach and justify it with the numbers you'd need.
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Recommendation: fix costing and portion control first, then choose between price and portion - and prefer a combination that protects the signature item.
Reasoning:
- At $48 with a corrected cost, the true food cost may already exceed 34%. Raising to $52 is an 8.3% price increase; if corrected cost is, say, $17.50 per cover, $52 yields ~33.7% - still above target. Price alone may not close the gap.
- Cutting the short rib portion on a 70%-ordered signature dish risks guest-perceived value loss at a premium price point - a demand risk the owner hasn't priced in.
- Portion control first: eyeballed portioning plus high plate waste is pure leakage. Standardized portions and yield tracking can recover cost without changing the guest experience.
- Then reprice with the corrected cost in hand, and address the dessert's imported chocolate (substitute or reduce) and cost the bread/amuse into the price.
Numbers needed to decide: corrected cost per cover for all three courses including bread and amuse; actual portion variance and waste on the short rib; price elasticity or at least guest sensitivity on the signature item. Decide with those, not with the plated-portion sheet.