One of the unwritten rules of the restaurant business is: Never do anything to bring attention to prices. Unless, of course, they’re really low. Standard wisdom goes that the less you talk about them, the better.
At Zingerman’s, however, we’ve broken all sorts of other rules, so we figured, let’s dump this one, too. We thought we’d take a few minutes to explain why a sandwich costs what it costs.
When we first started making sandwiches, we arrived at three basic principles:
We agreed we would always make the best sandwiches we could possibly make.
We agreed that if costs went up, we wouldn’t cut the quality of ingredients to compensate. The integrity of the product came first.
We agreed that we wouldn’t cut our sandwich portion sizes. We’ve actually increased the size of our sandwiches.
In truth, these principles are inextricably bound. But, while practically every restaurant claims to subscribe to “Principle A”, most of them are quicker to compromise on quality or portion size than they are to raise a price. We’ve learned that better food usually costs more money. (The inverse is not the case: more expensive food doesn’t necessarily taste better.)
So we’ve chosen to charge more rather than ruin the flavor or reduce the size of a Zingerman’s sandwich. Over the years, we’ve successfully widened our search for better-tasting sandwich ingredients.
We’ve switched to:
better bread
better cream cheese
better tuna
better pastrami
better Sauerkraut
better… you get the idea
Better ingredients really do make better sandwiches. At the same time, we’ve tried to remember that while raising prices is a difficult thing to do, much of the industry operates under an unwritten guiding principle that “the customer can’t tell the difference.” If cheese prices go up, buy a less expensive cheese — ”no one will notice.” If meat prices go up, cut an ounce off your portion — “who can tell?” Sorry guys, but as far as we are concerned, customers can and do tell the difference.
When we price a sandwich (or anything else we sell) for the menu at the Deli, we do it according to algebraic formulas, not a whim. We price according to widely-used formulas that allow us to pay our banker, pay our bills, pay our staff, pay ourselves (yes, it’s true) and stay in business to keep serving the best possible food to our customers.
Most people find it hard to believe, but the reality of financial life is that the margins on Zingerman’s sandwiches are 50-100 percent LOWER than the industry standards. Hardly anyone believes that, but it’s the truth. We had a group of business school students do a study on the Deli’s costs and they were flabbergasted at how much more our food costs compared to our competitors. How can others sell sandwiches for less? Simple, really: smaller portions, less flavorful/cheaper ingredients.
