> raise prices and hope that customers won't just go down the street
I always found the idea that restaurants need to compete on price strange. A typic Mexican restaurant is always going to lose to Taco Bell on that, so raising the price of your enchiladas or margaritas probably won’t have much impact on traffic.
We read a lot here about founders not setting prices high enough (see patio11 for tons of discussion). Or comment on backblaze being very hesitant to raise prices [0], but then buy into this idea that restaurants have set their prices optimally and that business will plummet if the $15 dish is suddenly $17. The truth is very few decisions on where to eat are driven by price (except at the high end) and instead are driven by experience and location.
That $15 vs $17 difference per dish might be immaterial to you, but if you include tax and tips, it’s a difference of a full hour of wage labor for a night out of a family with 2-3 kids with parents earning average wage.
I always found the idea that restaurants need to compete on price strange. A typic Mexican restaurant is always going to lose to Taco Bell on that, so raising the price of your enchiladas or margaritas probably won’t have much impact on traffic.
We read a lot here about founders not setting prices high enough (see patio11 for tons of discussion). Or comment on backblaze being very hesitant to raise prices [0], but then buy into this idea that restaurants have set their prices optimally and that business will plummet if the $15 dish is suddenly $17. The truth is very few decisions on where to eat are driven by price (except at the high end) and instead are driven by experience and location.
[0] https://news.ycombinator.com/item?id=20996555