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Stir it up magazine SEPTEMBER 2017

Traditional British Recipes T: 01547 530220 W: www.radnorhills.co.uk /radnorhills @heartseasefm radnor_hills Radnor Hills Mineral Water Company Limited, Heartsease, Knighton, Powys, LD7 1LU Premium Sparkling Pressés 7 Delicious Flavours Available in 330ml/750ml Glass & 425ml PET: Elderflower Pressé, Traditional Lemonade, Fiery Ginger Beer, Raspberry Lemonade, Blackcurrant Crush, Apple & Rhubarb and NEW Strawberry and Mint By Mark Wingett Editor, MCA. Eating and Drinking Out Market Insight The price has to be right! >> Without wishing to be accused of stating the obvious – pricing really is very important. It is critical to driving both top and bottom line growth - or at the very least, helping to offset decline.  In the current trading environment, with escalating input cost inflation combining with weakening consumer spending power, the importance of getting pricing right is only increasing.  Putting menu prices up too much risks alienating regular customers, while not putting them up enough, will inevitably impact on the ability to develop and invest in the business. So there are several tricky decisions to be made around where best to target price rises, but also, on where best to retain/reduce price points with re-specified and cheaper ingredients. For sure, business experience can certainly help here, not least in identifying more/less price sensitive menu items. However, before making any new pricing decisions, there is considerable merit in just stepping back and taking an honest appraisal of where an establishment is positioned in the local marketplace.  Broadly, is it premium and quality-led, mid-market/mainstream or based around price-led value? The reason is because menu prices not only convey the costs of different dishes to customers, but they also shape perceptions around market positioning. And the reason why this is important is simply because those operators with more coherent and consistent brand propositions, and who do not send out mixed messages, enjoy more sustained success.  Indeed, one of the interesting take-outs to emerge from our tracking of menu prices is the existence of three distinct price pointing categories.  Leading brands across pubs and restaurants typically adopt either £5, £9 or £0 price points – and rarely mix and match. The most popular, £5, is most commonly used by mainstream, mid-market operators, including Frankie & Benny’s and Wagamama. This is a relatively neutral price point, and contrasts with the psychologically far more important, £9, which still maintains an association with a slightly lower and cheaper price.  Unsurprisingly, this is most associated with value-led and low ticket operators, including Hungry Horse and McDonald’s. The final category, with prices either ending £0 or rounded up to the nearest whole pound, is the preserve of upmarket and more confident and contemporary brands, including the likes of Dishoom and Brewdog. So yes, the price has to be right – but so too do the price points! MCA SEPTEMBER 2017 25


Stir it up magazine SEPTEMBER 2017
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