Discount Dining? For Savvy Diners, Anyway

Tue Oct 20, 2009 8:13am EDT

* Reuters is not responsible for the content in this press release.

Study Shows .6% Price Drop on Casual Dining Menus

Dinner Entrées up 2.2%; Alcohol up 1.7%
BOSTON--(Business Wire)--
With all of the TV ads for discount entrées at casual dining chains -- not to
mention recent media coverage of price cuts --consumers may not realize that it
could be costing them more to dine out. 

According to research published by Boston-based pricing consultancy,
Intellaprice, how you order off the menu will play a large part in whether you
actually see a savings on your meal check. Intellaprice gathers, interprets and
monitors national prices for top restaurant industry players. 

"We hear a lot about the deals out there because that`s what`s being
advertised," says Leslie Kerr, President of Intellaprice. "Two for $20 dinner
deals and discount entrées are memorable, but the reality is there`s a whole
portfolio of menu items, and restaurants are strategic about managing prices in
key categories." 

Intellaprice`s research focuses on regularly priced items - not those subject to
special promotions. The findings indicate that the overall price change vs. 2008
is -.6%. Not exactly deep discounting-and this figure varies by menu category. 

Bar Beverage Prices Up Nearly 2%

Kerr notes that the continued economic downturn has impacted trends notably.
"This year, food prices overall are down by .6% and bar beverage prices are up
nearly 2%. That`s compared to our 2008 finding that food prices were up 2%
overall and bar beverages were up 5% vs. 2007." 

Categories whose average prices actually increased included dinner entrées at
2%, side dishes at 8%, and desserts at 7%. On the flip side, 2 categories were
down: appetizers decreased 2%, and add-ons - items like cheese or additional
proteins (bacon for example) - are down by 4%. "If you are a meat and potatoes
eater, who also likes dessert, chances are you could feel the sting," said Kerr.
"But if you stick to the promoted deals, or if you tend to make appetizers your
meal, then you`re more likely to save some money." 

Kerr explained that it`s an age-old game of pricing management in hopes of
driving profitability. "Restaurants feel pressure to take price increases
somewhere; it seems as though they`re trying to ease sticker shock for more
noticeable, popular items, and increasing prices in less noticeable places on
the menu." 

2009 marks Intellaprice`s third annual analysis of pricing trends in the casual
dining segment. The study covers top casual dining chains in 21 markets
nationwide. Nearly 2,900 beverages and 13,000 food prices are included in the
sample. 

Other findings show that among chains surveyed, Atlanta boasts the most
expensive dinner entrees, averaging $14.75, outpacing the New York, Chicago, and
Los Angeles metro areas. 

Drinks Up More Than Food

Drink prices increased more than food, which was also the case in the 2008
study. "We`ve all heard the anecdotes that bar business is impacted less in a
down economy, and the findings bear this out," Kerr said. "This year, once
again, the price change in bar beverages is significantly more than that for
food. The most expensive drink in the study, a top shelf margarita, was the only
one whose price was unchanged. Sangria saw the highest average dollar increase,
up $.28 to $6.07." 

Relative drink price trends show continuity with last year`s study. "Guests
dining out in Oklahoma City may be pleased to know that market continues to
serve the lowest priced drinks vs. other markets." New York offers more highly
priced drinks, with Washington DC a close second. A domestic beer costs $3.22 on
average in Oklahoma City, $4.13 in Washington DC, and $4.15 in New York on
average. 

Average Casual Dining Prices by Beverage

* Domestic Draft Beer $3.72 
* House Margarita $5.86 
* Vodka/Tonic - Well $5.06

About Intellaprice

Intellaprice is a full-service pricing intelligence firm serving the restaurant
and beverage industries. Intellaprice publishes the Intellaprice Report, which
is syndicated pricing intelligence on quick service and casual dining segments.
Intellaprice specializes in pricing, profitability, and marketing analysis, to
help organizations increase sales, grow profit, and reduce competitive
intelligence costs. Intellaprice was founded by restaurant industry veteran
Leslie Kerr and is based in Boston. For more information visit
www.intella-price.com.

Intellaprice® LLC
Leslie Kerr, 617-723-7977
lkerr@intella-price.com

Copyright Business Wire 2009