Sorry, should have been more specific! More correctly, they are debating if it's just time to retire now and be grandparents full time rather than risk losing a lot money in the restaurant due to increased prices, then being forced to retire.
I assume "closing down the restaurant and retiring" means they will sell the restaurant (or at least the property), but I am not sure to be honest?
Would raising prices 5 or 10% be so catastrophic to revenue that they couldnt even give it a few weeks? Or are they looking at a 50%+ price increase?
If they want to retire anyways, then good for them. But a lot of businesses have had to raise prices this year, including grocers, which are arguably restaurants only competition. I think folks would understand.
If raising the prices drives away customers, you have now lost a notable value if you try to sell. Brand perception is (almost) everything. Unless you offer something truly unique or exceptional, you're replaceable in just about every market.
There was a local beer taproom/bottle shop that I frequented a lot for years. Even as craft beer became more prominent and there were more local options, I liked it enough to keep going, but fundamentally there came a point where they raised their prices enough that I started going elsewhere, and once I broke that habit there was never a big reason to go back unless I was meeting someone else there once in a while.
In this case, "enough" was in the 20% range, but given what's happened to food prices lately I don't think 5-10% is a realistic number for a restaraunt either.
> If raising the prices drives away customers, you have now lost a notable value if you try to sell. Brand perception is (almost) everything. Unless you offer something truly unique or exceptional, you're replaceable in just about every market.
Agreed in general terms, but who is going to buy a business that cant even cover its costs? It sounds like this business has a negative expected value without raising prices.
Is this inflation creeping up in all the expected places? The value of goods is the same but the value of the USD is lower and thus we must increase costs. I don’t see it impacting brand perception if all prices go up.
I assume "closing down the restaurant and retiring" means they will sell the restaurant (or at least the property), but I am not sure to be honest?