Every morning on my way to work I see the head chef from a tony neighborhood restaurant get out of her car with a small bag of groceries. From Giant. Plain old Giant groceries. The same Giant where I buy my Cheerios, Wheat Thins, Brie, and brillo pads.
From the shelves of my Giant to that night's dinner tab, the contents of that bag are marked up by more than 300%.
There's no argument that the magic she works with those ingredients from the local grocery store is a far cry from the concoctions I create in my kitchen, or, evidently, anything the rest of the nation is whipping up. According to U.S. Bureau of Labor statistics, the average household spends about $2,000 dining out, and about $3,000 on home cooking each year. Retail sales at eating establishments account for around 10% of total retail trade in the U.S.
We love other people's cooking. But everywhere from Chez Chi Chi to Chi-Chi's to Chuck-E-Cheeze, diners are paying a premium to sit back and be served.
It's enough to kill your appetite.
Would you like $36 fries with that?
Love the lunch specials at your neighborhood deli? So does the proprietor. A burger, can of Coke, and bag of chips may seem like a bargain at any price. But between the buns there's a pretty fat markup.
Take that bag of plain potato chips. No one flinches at paying 60 cents for a 1-ounce bag. But would you put a $7-plus bag of the same stuff in your grocery cart? The actual price -- around $2.99 -- is what we expect to pay when we go shopping. We pay more than three times the cost for a $2.35 burger and five times more for a plain dog in a bun that we could nuke at home for just 36 cents.
Turn the corner and grab a snack at Mickey D's and the markups go through the roof. There's a reason your server encourages you to super-size your meal. It may be pocket change to you, but a few extra fries and a shot of Coke adds just pennies to McDonald's
According to Eric Schlosser's "Fast Food Nation," an expose on the industry, those frozen buds, at 30-cents a pound, emerge from the fryer and onto your tray at a whopping $6 a pound. That $1.29 Coca-Cola
Yet, our appetite for fast food appears to be insatiable. In 1970, Americans spent $6 billion on burgers and fries. By 2000, we were forking over $110 billion for fast food -- fattening the fast-food industry's bottom line, and our own. Today nearly two-thirds of the population is overweight and one in three of us is clinically obese. Fat Food Nation, indeed.
It's enough to make you order a salad. At least until you get the tab.
The math behind the marinade
There's a reason that veggie-based appetizers dominate the menu. Salads and side dishes are cash cows: Restaurant owners mark those up five to 10 times what they paid. Most meals are marked up 300%, or four times the cost of ingredients, meaning you'll pay $20 for pasta con frou frou or quiche l'orange that cost the restaurant around $5 to make. A cut of meat, on the other hand, is not a huge profit maker -- a $7 sirloin will go for just $10 or $15.
Little wonder constructing a menu is an exercise in behavioral economics. Unless you're a really conscientious date, most diners tend to pass over the cheapest entrée on the menu. Restaurateurs make the second- or third-cheapest on the menu the most profitable.
But when it comes to really raking it in, please peruse the wine list. Wine is liquid gold to restaurateurs: You pay three to four times liquor-store retail to imbibe. While not McDonald's-style markups, that $8 bottle of so-so merlot becomes a $32 splurge when the cork comes out. (Wine by the glass can go for $5 to $8. The math on that one can make even the most discerning palate gag.)
On the coasts, brown bagging it (that is, bringing your own bottle of tipple to enjoy with your meal) is becoming common. But don't bother packing a corkscrew in your purse. Many restaurants that accommodate patrons who want to enjoy their own vintage charge a corkage fee that can range from $10 to a heady $45.
In the restaurant's defense, running a decent joint is pricey. Costs include rent, utilities, your friendly server, turnover, the bud vase, and gerbera daisy on your table. A fine wine cellar can set a restaurateur back half a million dollars. Hence, the corking fee.
When I worked at a sandwich shop in college, fountain soda was free for workers. But if you were caught using a coated plastic cup with the company's logo, you paid retail. The owner made a point of instructing us to use Styrofoam cups instead. I pitied the co-worker caught using the good napkins to clean up a spill.
Food, it turns out, is usually a restaurant's smallest expense.
Gorge and gouge
Before you make reservations, consider some of the tricks of the food trade that can make your dining experience less appetizing.
"Convenience" fees: Corkage fees are one item not often listed on the menu. Same goes for sharing charges. So if you and your dining date eat like birds, ask about any extra costs for splitting an entrée.
Specials with "special" prices: Don't get stiffed when ordering the special of the day. The cost is too often left out of the server's painstakingly detailed description. Don't feel bad about asking. Each adjective can add a dollar or more to the price. So be prepared.
Drink damage: Bottled or tap? You usually don't hear the latter offered at nicer establishments. You can pay five dollars or more if you want your water with fizz. And when it comes to ordering soda or coffee, don't assume that the cup is bottomless. Shrewd proprietors pad the bill by charging you for every swig.
Salad bar tricks: Swank sells. Putting a few pricey items on a salad bar helps proprietors boast about the unusual offerings. It may sound enticing when you're ordering, but many diners tend to leave the caviar and mangoes untouched. Don't get taken in by a pretty package.
All-you-can-stomach brunches: A great way for restaurants to get rid of day-old food is to have a prix-fixe brunch with last night's un-ordered entrees. Before you dive in, survey the offerings and see if they are up-to-snuff.
Billing blunders: Finally, when the bill comes, be sure to check it for accuracy whether you're at a fast-food chain or a white-tablecloth restaurant. Boo boos happen -- intentional or not. If something strikes you as questionable -- about your meal or what it costs -- discuss it nicely with your server or the manager. Remember, it's not your server setting prices (or cooking your meal, for that matter), so it's bad form to shortchange him or her when it comes to tipping.
If your meal -- or what you pay for it -- leaves you wanting, there's always the corner Giant. Apparently, what we eat out is made from the same stuff they sell there.
Dayana Yochim does not fear day-old sushi but she's afraid to subject guests to her own cooking. The Motley Fool is diners writing for diners.
