One of London’s leading restaurants has this week begun trialling a new pricing model, where patrons will pay less during ‘off-peak’ hours. The model, borrowed from the hotel and airline industry, will be watched closely by other restaurants keen to see how the gamble pays off.
The restaurant, Bob Bob Ricard, a luxurious dining room best known for its champagne call buttons at each table, will offer the same menu every day but with pricing differences – 25 percent off for Monday lunch, for example, 15 percent off for dinner of Sundays and Tuesdays, and full price for Friday nights. The discounts could work out to be significant for Monday lunch fans – Russian Oscietra caviar, which would normally cost £49, would only cost a diner £36 – an NZD$24 saving.
“The idea just came from looking at how the rest of the world functions,” said owner Leonid Shutov. “Airlines wouldn’t be able to exist, the business model wouldn’t work unless you could balance supply and demand. Everything that we have taken that is widely accepted in the modern economy and applied to restaurants, seems to have worked.”
The move was inspired by the disparity in diners between on and off-peak times. Monday lunch might see 40 diners, while Saturday could see a full capacity of 400 plus a waiting list.
Shutov is renowned for his unconventional methods in convincing diners to part with their money. He reduced margins on wine and displayed his prices on the menu next to what diners might expect to see at rival restaurants.
“It’s what we learn in economics 101, it calls for price differentiation,” he said. “I do realize it’s a bit of a brave decision because any departure from the standard model involves risk. But I am not really worried. We are not changing the menu. We are not trying to entice customers with anything from what they know and love. We are just saying that on certain days it will cost less.”