Canoe

[ITD]

Originally Posted by jetskier

OK...I'll bite on that one. Let's look at the math:

The dock price of lobster is about $3.50/pound and lets consider the yield to be about 25% (conservative). We will estimate that there is about $4.00 of lobster in the dish with wholesale markup.

The pasta is about $1.00/lb so the contribution is .14
The milk is about $1.50/qt so the contribution is .21
The cheese is approximately $4.00 (16 oz) so the contribution is .57

Let's say everything else is another .50 (reasonable). Then the total cost of ingredients is $5.42.

Since Canoe prices this dish at $22, the direct margin is 75%

At a 66% direct margin, there is room for about 50% more lobster or a price of about $16 for the dish.

Clearly, Canoe has the right to price their food any way they like. No one is forcing me to eat there...I just think that their pricing is not reflective of the current market conditions. Just my opinion

Jetskier

You forgot overhead costs and labor costs, people don't work for free, electricity, water, maintenance, insurance, so on and so on, if you base your prices soley on raw materials cost you will be bankrupt very quickly.....