Ryan Sutton loves Cosme, a high-end Mexican restaurant in Manhattan, but he doesn’t love its prices, which are not only high but also rising at a rapid pace. “The prices Cosme charges, while always high, have become somewhat startling in their upward trajectory,” he complains, saying that “I can’t think of a single a la carte venue where the cost of dinner has gone up by as much over the past two years.”
Sutton is the first to admit that there are very good reasons for restaurants to raise their prices. In fact, he puts it better than I could:
Labor costs, in particular, have increased in the years since my Cosme review; the city’s hourly minimum wage is steadily rising toward $15, and the tipped wage, the rate that most waiters earn, will jump to $10 by the end of next year. What’s also worth noting is that young restaurants — which often keep prices low during their early months as an extended friends and family discount of sorts — often raise them after the review cycle ends to meet their own financial needs and to retain the talent of veteran employees who can justifiably command better pay.
So, why the resentment? Restaurants need to make money in order to stay in business, and it’s only right and proper that they should pay all of their employees, including the back of house, a decent living wage of at least $15 per hour.
On top of that, when you have a popular restaurant like Cosme, where demand for tables exceeds supply, then price is the obvious mechanism for bringing the two in line with each other. Sutton likes restaurants where it’s easy to walk in and find a seat, but that’s never going to happen when prices are so low as to attract more would-be diners than the restaurant has capacity to serve. Raising prices doesn’t just mean that the staff and owners can make more money, it also helps to thin out the crowds and make for a less stressful dining experience.
It’s also worth noting that Cosme, as a Mexican restaurant, is going to have a significantly lower average check size than its peers charging identical sums for food. That’s because Cosme’s high-end peers attract a significant quantity of diners eager to spend vast amounts on wine; even a few such diners can make a huge difference to the total bottom line. (Bianca Bosker, in her new book Cork Dork, talks of one customer who spent $3 million on wine at a single restaurant in one year.)
That explains the $13 Dos Equis which so offends Sutton: Even high rollers tend to want to drink beer in Mexican restaurants, and so raising beer prices is necessary if the beverage program is going to come close to pulling its weight financially. It should be thought of in much the same way as a $14 salad: you’re not paying for the raw materials, you’re paying for the entire restaurant experience.
Still, we’ve all felt a bit like Sutton at times. You find a great new place, you love it, and then it starts raising its prices to the point at which you feel like you can’t even afford to go there any more. That’s happened to me many times, and it always makes me feel resentful.
There’s no way around it, though. The restaurant industry is brutal, and it makes perfect sense to charge as little as you can when you open, until you build a following and a reputation, and while you’re still ironing out all of the kinks. The people who visit you during those months are getting a bargain, even if (in the case of Cosme) they’re still shelling out very large sums of money. And bargains don’t last forever.
So next time you see your favorite restaurant raise its prices, be happy for them: it’s a sign they’re succeeding in this toughest of industries. And if you can’t afford to go there any more, don’t be too sad, especially if you live in New York. There’s bound to be no shortage of exciting new alternatives nearby.