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February 22, 2010

The One Day a Week Restaurant

Eric Crampton emails me:

    Why don't we see more of this? I went to the only Ethiopian restaurant in New Zealand last night. It runs one day a week - Mondays - in a Burmese restaurant that otherwise was closed on Mondays.

    http://offsettingbehaviour.blogspot.com/2010/02/one-day-week-restaurant.html

    I can understand that this kind of arrangements would have risks for the host restaurant. Ideally, you'd want it from a non-competing cuisine style. But this is the first instance of it I've ever seen. Have I just not been paying attention? The story from the Dominion Post on how the place opened is very nice. The woman running the Burmese restaurant was an immigrant from Burma who later started volunteering with an NGO that helped new migrants acclimatize. She met a guy there who wanted to open an Ethiopean restaurant but had no capital; her restaurant was closed Mondays.

    The other 6 days a week the Ethiopean restauranteur drives a cab.

Originally posted on Marginal Revolution - click to see comments and suggestions.

Posted February 22, 2010 04:52 PM | Permalink  |  Economics of Dining  | Comments (2)

February 13, 2010

Why was El Bulli losing so much money?

Leigh Caldwell offers an analysis. Here is one bit:

...why is it losing so much money when demand is so high? The 48-seat restaurant has a six-month season with about 8,000 covers a year. It receives 300,000 applications for those seats [though this article says a million and this one two million], selling out the whole year's reservations on the same day that bookings open for the season. Why wouldn't they bump up the price from 230 to 330 euros, to simultaneously manage demand and eliminate the losses? Price elasticity can't be that high.

My hypothesis is that the restaurant was never intended to turn a profit, but rather it was a loss leader for book sales, endorsements, lecture fees, TV contracts, cookware lines, and so on for Ferran Adria. Even if higher prices could bring in a twenty percent rate of profit, it wouldn't -- at this point -- be worth keeping the place up and running. Adria already has a reputation as the world's greatest chef, running the world's greatest restaurant. It's best to quit while ahead and branch out into food-related money-making ventures.

The low prices make going a hard-to-obtain event, open up the restaurant to more people than just the very wealthy, and maximize the publicity value of Adria's name.

He won't and can't stop cooking forever, but cooking six months a year is probably not an optimum for him at this point. The real profit and loss calculation for El Bulli has to include the shadow price of his labor as an important variable.

Originally posted on Marginal Revolution - click to see comments and suggestions.

Posted February 13, 2010 06:37 PM | Permalink  |  Economics of Dining  | Comments (0)

May 11, 2009

Standard dishes for testing the quality of a restaurant

Joshua Johnson, a loyal MR (and TCEDG) reader, asks:

    If you are going to a new ethnic restaurant, what staple items do you order that for you, let you know if the restaurant is worth coming back to and trying more of their offerings? It would be nice if you could make some sort of list for Chinese, Vietnamese, Japanese, Thai, Turkish, etc.

Here goes:

Japanese: One bite of the tempura tells all.

Chinese: Ma Po Tofu, or for some kinds of Chinese places Hainan Chicken with Rice.

Thai: Almost any dish shows the true colors of a Thai restaurant immediately.

Turkish: Doner Kebab, taking special care to ponder the tanginess of the yogurt and how it interacts with the meat.

Vietnamese: Anything with lemon grass, which is hard to use well.

Ethiopian: Kitfo or barring that lamb tibs.

Peruvian: Lomo saltado, taking special care to check for the right amount of cilantro in the sauce and the correct sogginess of the french fries.

Bolivian: Silpancho, and check the liquidity and consistency of the egg on top.

Afghan: Kadu (pumpkin) and is it too sweet?

Korean: Seafood pancake and in general the quality of their kimchees.

Indian: Most dishes will do (see "Thai"), although avoid the Butter Chicken as a metric of quality. Lamb with spinach is my do-or-die default judgment dish for an Indian restaurant, if only because you get to taste both the lamb (less likely to be tender than the chicken) and the spinach..

Restaurant, general: How's their chili crab? If it's not outstanding, or not on the menu, press eject immediately and get yourself to a different country.

Can you think of others? (see comments on MR)

Originally posted on Marginal Revolution.

Posted May 11, 2009 08:17 AM | Permalink  |  Economics of Dining , General Tips  | Comments (6)

July 13, 2006

In the Language of Gastronomy, Those Michelin Stars Translate as Dollar Signs

Receiving a Michelin star increases prices in a Parisian restaurant by 20 percent, controlling for measures of quality, décor and location. Michelin-starred restaurants in fancy hotels, or in areas with other Michelin-starred restaurants, also have higher prices, again adjusting for quality. Diners are paying more to eat in fine or prestigious surroundings, whether or not the food is better. One gastronomy expert, speaking in Le Nouvel Observateur, noted, “Gaining a Michelin star ensures that your banker will be kind to you.”
. . .
It remains easier to get good cheap food in the United States, if only by looking to the growing number of ethnic restaurants, most of which stand outside formal ranking systems. Labor laws that are more flexible than those in France also support more dining options in the United States. Most Michelin-starred restaurants in Paris are closed on Sundays, and many are closed on Saturdays as well. Labor costs are the major culprit.

"In the Language of Gastronomy, Those Michelin Stars Translate as Dollar Signs," by Tyler Cowen, The New York Times, July 13, 2006

Posted July 13, 2006 07:47 AM | Permalink  |  Economics of Dining , General Tips  | Comments (0)

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