Sarah Schmidt
Province
Changing menu typography is like picking the low-haning fruit when it comes to squeezing every last cent from a business. – THE PROVINCE
OTTAWA — Restaurateurs can get diners to spend more on a meal if they drop the dollar symbol from their menus, new research shows.
A team at Cornell University in New York tested whether the price presentation on menus affected how much customers were willing to spend.
The findings, the first to establish a relationship between consumer attention to menus and purchase behaviour at a restaurant, found menus using a numerical price format without the accompanying “$” symbol yielded, on average, $5.55 more in spending than menus with prices printed with either a dollar sign or written in script.
“Changing the menu typography is like picking the low-hanging fruit when it comes to squeezing every last cent from an existing business,” according to the article to be published in the forthcoming edition of the International Journal of Hospitality Management.
The researchers presented three versions of a typical lunch menu at a local “upscale-casual” restaurant, and gleaned their results from 201 participants who used a menu with listed prices as XX, $XX or scripted words. For example, if a menu item cost $20, the menu stated 20, $20 or twenty dollars.
The study found no difference in spending patterns among customers using menus with numerical price formats with the “$” symbol, and scripted prices with the word “dollars” at the end.
“That prices presented in the ‘XX’ format actually resulted in higher spending than scripted prices was surprising,” the researchers acknowledge.
“However, the scripted presentation format used in this experiment included the word ‘dollars’ at the end of each price. Perhaps the act of repeatedly reading the word ‘dollars’ acted as an unintentional prime and activated concepts of cost or price, initiated a pain of paying, and subsequently caused guests to spend less.”
In an interview, lead author and doctoral candidate Sybil Yang says restaurant owners would be wise to consider changing their menus.
“Especially inside today’s environment, where they are looking everywhere to squeeze pennies, this is really low-hanging fruit. It doesn’t piss off the chef. You’re not playing around with ingredients. This is incredibly easy.”
In Canada, the average pre-tax profit margin in the country’s food-service industry (4.3 per cent) is less than half the average for all industries in Canada (8.8 per cent), according to the latest survey by Statistics Canada, released in June.
According to the Canadian Restaurant and Foodservices Association, the growth in sales forecast at full-service restaurants is expected to be a paltry 2.8 per cent in 2009, based on an anticipated slowdown in consumer spending as families juggle high debt and rising prices for energy and food.
The average Canadian household spends 24.4 per cent of its total food dollar on food service, compared to 41.4 per cent for U.S. households.
This is the latest research showing how consumers can be manipulated in various retail settings with subtle changes to the way prices for some products are presented.
Other researchers have found that value-oriented customers perceive some products, including food in supermarkets, to have more value when presented with prices that end in the number “9” than with “0” price endings.
© The Vancouver Province 2008
