Sticker Shock

Just days after Restaurant Dive's "Study: Independent restaurants show signs of recovery despite inflation" article, People magazine reports, "Port Authority will regulate Airport food and drink prices after travelers report $27 beers." This issue of pushing boundaries on prices is not unique to airports. I recently sat with a corporate buyer trying to standardize pricing across his properties, and what relayed, as I understood it, was that the lower check average concepts were asking for higher prices on the same items because they were at the top of the price range in those locations. In comparison, higher check average prices contained hundreds more selections to stretch into higher price categories.?Some places have legitimate reasons for charging higher prices on the same item, just as gas is different nationwide. Still, as an operator, you cannot alienate your guests by being too aggressive.

Let's look at this same situation through our lens of this new regulatory ruling from the governing body of the airports around New York. I understand the desire for operators to make the maximum amount on every transaction, but $27.85 for a pint gets consumers mad enough to send in written complaints.?

We at TopShelf Consulting recommend fair margins, and if we are going to test higher price points, it is with higher-cost products that deliver value to the guest.?We have the goal for all the operators with whom we work, and that is for every consumer to be as excited about the beverage program as they are for the food program. The only way that happens is to provide the consumer value at all price points.?Sam Adams Summer Ale is $15.99 for a twelve-pack at Walmart and is available nationwide. That simply does not provide value to customers even if they're "trapped" at an airport.?

The Boston Beer Company did not set the prices, but now their products are splashed everywhere this article is running. With these usury prices, their name is now more familiar to thousands of readers. And New Belgium Fat Tire is listed on the same page at $20.60. I assume the breweries are furious. Whenever you look to take some extra margins, you are doing your supplier partners no favors and can do lasting damage to those relationships.

Of course, outlets are free to set their prices. Corporate buyers should get costs that provide maximum value for their employers as long as they still offer solid value for guests.

As a brand market manager for an adult beverage brand, it is wise to be vigilant about the representation of your brands in the market. The article written by Sabrina Weiss stated that the price of that pint was almost twice the price of the same beer at Yankee Stadium. I am sure the corporate director for this location would have loved to have known that information and would have been thankful to get that call from the brand manager. Ideally, restauranteurs and bar owners should cultivate relationships with all the brands they work with to help avoid these embarrassing situations.