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Hospitality Leadership Through Learning
Faculty & Research

$ or Dollars: Effects of Menu-price Formats on Restaurant Checks

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Vol 9 No 8
By:  Sybil S. Yang, Sheryl E. Kimes Ph.D., and Mauro M. Sessarego

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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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Comments

Exactly!  I have been doing pricing without dollar signs (and decimal points) for years now, as they do a lot in Europe, with significant increases in revenues.

Doug Zeif
Vice President, Food & Beverage- Americas
Hilton Hotels Corporation

How true!  I am a 40 year veteran of the casual family dining segment and a professional menu engineer/designer for the last 10 years.  I proved this theory designing menus for my own use and now get on my soapbox when my menu clients balk at removing the $.  Since I found this report I sent them a link and we wound-up removing them all.  Thank you for such a well done report, it has helped countless restauranteurs increase sales/profitability with an easy change.

Mike King
Media Design 3

We have been running our menu w/o the $-sign and have found an increase in spending.  We also imbed the price in the paragraph description of the menu item.  See example below.

The Hill Hogger
Become apart of the Hill Hogger Hall of Fame when you down this sandwich … A pile of pulled pork, a taste of cole slaw & two hand dipped onion rings set on top a slice of Home style White Bread put all that on top of a well seasoned half pound fresh burger with lettuce and tomato then stuff it between a toasted Kaiser roll speared with a pickle to create the ultimate BBQ Burger served with one side 16.99   Are you Man enough?


Kathy Reeder
Proprietor
Hempen Hill BBQ Bar & Catering

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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