Wednesday, June 2, 2010

All-You-Can-Eat is More Now

I am seeing signs of financial stress related to food costs at all-you-can-eat buffets. There have been some price increases, but mostly restaurants are changing the physical arrangement of the buffet or the signs around it to try to find ways to get people to eat a little less.

It is not that the cost of food has gone up. Prices for most food ingredients are less than at the 2007-2008 peak. Rather, it is that customers are eating more. This is apparently the result of financial pressure on consumers from the malaise of the job market. At the buffet, what this means is that more people arrive hungry — and this is not merely the social hunger of being emotionally ready to eat a full meal, but the kind of hunger that economists talk about, in which people are feeling the physical effects of eating less than usual for a couple of days. People may also be affected by the fear of a shortage of food in the near future well before the shortage actually materializes. Given the chance to eat as much as they want, hungry people eat more at a meal, as much as 25 percent more.

If I am seeing this in the prosperous suburbs of southeastern Pennsylvania, seemingly unaffected by the recession, I have to imagine the effect is larger in other areas. It is a tricky problem for the buffets to address. With revenue already down because of the recession, they don’t want to lose any more customers — the hungriest customers are still more profitable than an empty table. This means they don’t want to raise prices or make obvious cutbacks or compromises. Nevertheless, they may need to find ways to spend less on the food they are providing.