Restaurant meals cost a lot more than meals you make at home — you know this. But what you might not realise is those add-ons, like that oh-so-delicious guac on your burrito, can be some of the most costly offenders.
Photo by Julio Pinar.
Long gone are the days where adding cheese to your burger cost $0.50. Now it cost you about three times as much. As the data-crunching folks at Priceonomics explain, most restaurant add-ons tack on an additional $US1 to $US3, depending on the item. And, as you may have guessed, these items barely cost the restaurant anything.
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Adding meat to a pizza, for example, costs you an average of $US3 per additional topping, but it only costs the pizzeria $US0.48. That’s a whopping 525 per cent markup per item. It’s the same markup for vegetables on your pizza too. It’s $US2 per topping for you, but only $US0.32 for the restaurant. In fact, pizza in general has the highest markup of any restaurant food out there. A plain margherita pizza hovers around 580 per cent, and a meat-lovers comes in at 636 per cent.
If we go back to burgers, adding cheese now costs you an average of $US1.50, as opposed to the $US0.29 they pay — a 417 per cent markup. The average cost of a restaurant burger in the US is around $US9, so adding cheese makes it $US10.50. Now the overall markup of your burger has jumped from 384 per cent to 436 per cent. Of course, none of this is a huge shocker if you’re familiar with the restaurant business. Those markups are how restaurants make their money, after all, and they’re not going away. That said, there are some add-ons that have a little more value than others. Like good ol’ guac.
Adding guacamole to your burrito costs an average of $US2, but costs the restaurant about $US0.52 per serving. That’s only a 285 per cent markup, which is fairly low comparatively. And if the restaurant offers a “deluxe” version of the burrito where several add-ons like guacamole, sour cream and peppers are automatically included, the markup cost is significantly less. According to Priceonomics data, a standard burrito with meat has an average markup of roughly 346 per cent. The deluxe version’s markup is only about 158 per cent. Sour cream on its own, however, has a hefty markup at 425 per cent. So if you want guac and sour cream with your burrito, definitely go for the deluxe version if that’s an option.
Priceonomics’ calculations and pricing are based upon US figures, so the exact numbers may vary, but the same principles apply in Australia.