Originally posted by: kranky
Originally posted by: rgwalt
Originally posted by: kranky
Why pick on the soda? It's the only thing you get in a restaurant where you can have as much as you want.
Because that $2 soda costs them pennies.
Ryan
Yes, the soda costs them pennies. So they make $1.75+ on the soda. But they make $10 on a $15 steak and they make $2.50 on $3 french fries. There's $3 profit on a $4 dessert. They make money on every item they sell! I just don't know why people single out the sodas.
I work at a restaurant company and I assure you that we are not all sitting around counting our money. The restaurant industry is no more profitable than any other industry.
Our food typically costs about 30% of the menu price. While this may seem low, the overhead associated with running a restaurant is surprisingly high. If we only sold food, our margins would be razor-thin. Liquor (obviously) has a much higher markup which helps our profits.
Additionally, as someone pointed out, it's a very labor-intensive industry and labor is our biggest cost (especially here in Oregon, where we have a very high minimum wage and no tip credits).
We currently run 24 restaurants, and not all of them are profitable. We do not "make money on every item we sell"... I wish we did, because we'd all retire early!
Oh, and the syrup in a glass of Coke costs about 18 cents.

But you have to buy the glass, buy a Coke machine, buy an ice machine, pay someone to deliver the Coke, pay for permits and licenses to be allowed to serve the Coke, buy tens of thousands of dollars worth of dishwashing equipment, buy special dishwashing chemicals, pay the rent for a place to keep everything, pay water and electricity to power the dishwasher, pay the server, pay the runner, pay the manager, pay the busser, pay someone to run the dishwasher, account for broken and stolen glasses... you get the picture.