‘This is why I drink and eat at home’: Bartender Explains 400-500% Liquor Markup & 300% on Food

What makes an $8 frozen pizza “crazzzzy”? This simple question sparked a fiery online debate, pulling back the curtain on the often misunderstood world of food service pricing.

Let’s dive into this hot topic, guided by the insights of a seasoned bartender who argues that this price might actually be a steal.

A Different Perspective

A recent incident involving a bartender named Michelle Charlotte, who has amassed a following of 4.2 million people on a popular social media platform, brought this topic to the forefront.

Michelle responded to a user who was astonished that the bar she works at charges $8 for a frozen pizza, a price the user deemed “crazzzzy”.

Michelle, however, had a different perspective. She believed that the price was quite reasonable, considering it to be on the cheaper side. She explained that establishments that serve liquor usually mark up their prices by 400-500%, and those that serve food generally have a 300% markup on food items.

This pricing strategy is essential for these establishments to turn a profit, considering various factors such as labor costs, utilities, and other operational expenses.

A Glimpse Into the Business Model

Michelle shed light on the business model of her establishment, revealing that the pizzas they serve are purchased from Walmart for $3.86 each.

She argued they should charge around $12 per pizza to maintain a healthy profit margin. However, the owners are not keen on increasing the price as their primary goal is not to make a substantial profit from the pizzas but to offer patrons an affordable dining option, given that the establishment does not have a kitchen.

Emphasizing that the current price point allows them to make a modest $4 profit per pizza, which is reasonable considering they do not have a dedicated kitchen for food preparation.

Moreover, she noted that people under the influence of alcohol are less likely to be concerned about the price, indicating that the markup could be even higher.

Public Opinion on the Pricing Strategy

The pricing strategy adopted by the bar has elicited a range of reactions from the online community. The price would be justified if the bar tried to enhance the pizzas, perhaps by adding extra toppings.

Others, however, appreciate the value offered, pointing out that the price includes a whole pizza, which contrasts with the higher prices other establishments charge for just a slice.

Furthermore, some patrons admitted that while they might hesitate to buy the pizza at that price while sober, their decision-making process would likely be different under the influence of alcohol. One user said, “This is why I drink and eat at home”. Another one added, “

This sentiment was echoed by another user who noted that people often need help understanding the intricacies of the food service industry and the necessity for markups to ensure business viability.

“People genuinely don’t understand food service. They assume the food/drink should cost what the business pays”

Mark Ups In The Bar Industry

In the bar sector of the hospitality industry, the markup on alcoholic beverages is notably high, often ranging from 200% to an astonishing 575%. This significant markup is partly due to the increasing wholesale prices of many food and drink items in recent years.

Interestingly, the markup acts as a kind of equalizer among different types of drinks; beverages with higher wholesale costs tend to have a lower markup percentage than those with lower costs.

This pricing strategy is not only a means to cover the rising costs but also a way to maintain a perceived value, as customers are generally less likely to object to higher prices on alcoholic drinks, which are often viewed as luxury items rather than necessities.

Moreover, the markup helps to cover additional expenses such as specialized glassware and staff training, which contribute to the overall experience at the bar.

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Sources

1. recipes.howstuffworks.com/menus/restaurant-markups.htm

This article was produced and syndicated by Viral Chatter. It was inspired by this video:

@michellebellexo Replying to @Jordan Corona what’s actually crazy is the number of people in the comments thinking $8 is way too expensive for a frozen pizza, but they have no problem paying $8 for a single Tito’s and soda #bartender #divebar #frozenpizza #cheap #businessowner #barowner ♬ original sound – Michelle Charlotte Bartender