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$ or Dollars: Effects of Menu-price Formats on Restaurant Checks
Executive Summary: Empirical research on menu design and price presentation has focused primarily on menus' effects on consumers' attitudes, and not necessarily on actual purchase behavior. This study examines how customers reacted to menus' price formatting in terms of actual sales, as measured by check totals for lunch at St. Andrew's, the restaurant at the Culinary Institute of America, in Hyde Park, New York. Price formats tested in the study were a dollars and cents numerical format with a dollar sign ($00.00), a numerical format without a dollar sign (00.), and scripted or written-out prices (zero dollars). While the numerical manipulation did not significantly affect total spending when compared to such non-menu factors as party size or length of time at the table, the price formats did show noticeable differences. Contrary to expectations, guests given the numeral-only menu spent significantly more than those who received a menu with prices showing a dollar sign or those whose menus had prices written out in words. Psychological theory, by contrast, predicted that the scripted format would draw higher sales. Although these findings may apply only to lunch at this particular restaurant, they indicate that menu-price formats do influence customers' spending, both in terms of total check and spending per cover.
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About Sheryl E. Kimes Ph.D.
Dr. Sheryl E. Kimes is a professor of operations management at the School of Hotel Administration. From 2005-2006, she served as interim dean of the Hotel School and from 2001-2005, she served as the school's director of graduate studies. Kimes teaches restaurant revenue management, yield management and food and beverage management. She has been named the school's graduate teacher of the year three times. Her research interests include revenue management and forecasting in the restaurant, hotel and golf industries. She has published over 50 articles in leading journals such as Interfaces, Journal of Operations Management, Journal of Service Research, Decision Sciences, and the Cornell Hospitality Quarterly. She has served as a consultant to many hospitality enterprises around the world, including Chevy's FreshMex Restaurants, Walt Disney World Resorts, Ruby's Diners, Starwood Asia-Pacific and Troon Golf. Kimes earned her doctorate in Operations Management in 1987 from the University of Texas at Austin.
For more information visit http://www.hotelschool.cornell.edu/research/facultybios/faculty.html?id=43.
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