Dining out and the pricing debate

Standard People
by Rosie Mitchell This reviewing season we’ve already run a couple of articles about restaurant pricing. An oft heard complaint from the general public is that we in this country are paying too much for our groceries, restaurant meals, and pretty much all else. Such complainers tend to compare prices with either South Africa or countries in the developed world.

There is so much more to this than meets the eye, however. Both South Africa and the developed world, for a start, enjoy the “economies of scale”. The larger your economy, the larger your markets, the lower your pricing can be — and you’ll still make a profit. Margins can be tiny, yet money is made all the same.  Manufacturing and production is done on a massive scale and accordingly, down comes the price.

Secondly, for reasons one need hardly spell out, Zimbabwe’s economy is a fraction of the size it once was, and the manufacturing sector likewise. We have become a net importer of so many products that we once made at home. As a net importer, we are hence paying more than those south of the border do, for everything that comes here. How can we not?

 

There are duties and taxes and clearing agent and transport costs to factor into the price of everything that isn’t made here. And those things that ARE made here, of course, do NOT enjoy the economies of scale mentioned, and in addition are being produced for the most part using antiquated machinery, because of the economic and other woes this country has suffered for so long. The production costs are consequently higher than they would be, using more modern technology. Manufacturing businesses are for the most part, woefully undercapitalised still, and woefully in need of new equipment.

Yes, there are some who rip off the public, yes there are those whose profit margins and mark-ups are somewhat outrageous, but remember the rubric, caveat emptor or “buyer beware”? You don’t have to buy from them!

The restaurant trade’s pricing has come down a lot since early 2009, and prices have generally stabilised out at very comparable levels nationwide. This being the case, surely it is indicative of the trade as a whole having reached pricing levels that actually allow them to stay in business by making a small profit, while still keeping the dining public coming back for more? If the pricing was totally off key, their tables would be empty, and they most assuredly are not!

Dining out has never been as popular, it seems, and we now enjoy a vast array of different kinds of restaurants to try out!

Restaurants are subject like all of us to the legacy of decades that has led to input costs being far too high — yet this is not in their control, or ours.  Most of their groceries and ingredients, just like yours, as a diner, are indeed imported, and cost more than they would on a shelf in South Africa. So of course they are not going to produce a meal at a price less than or equal to their peers down South! I reckon we should cut them some slack!

Let’s give the trade a bit of leeway before we judge them so harshly with regard to the price of their meals. Make some comparisons across different restaurants and you start to see that for the most part, restaurants within the same category generally have similar pricing. Pay more attention to what you are paying for your own groceries and then decide if you think a restaurant is overly pricey.