Menu Pricing Psychology Flashcards

What is a 'loss leader' item on a restaurant menu?

Answer: An item priced below cost to attract customers and drive higher-margin purchases

A loss leader is priced at or below cost to attract diners, with the expectation that the visit will generate profitable ancillary sales like beverages, appetizers, and desserts.

The 'anchor price' strategy on a menu involves placing a high-priced item at the top of a category to:

Answer: Make all subsequent items in the category feel comparatively affordable

An anchor price at the top of a section resets the diner's reference point, making $30 items seem reasonable when anchored against a $60 item listed first.

What does 'food cost percentage' measure in the context of menu pricing?

Answer: The ratio of the cost of ingredients to the menu selling price

Food cost percentage is calculated as (ingredient cost ÷ menu price) × 100, and most full-service restaurants target 28–35% to maintain profitability.

Grouping high-margin items together in a menu section is a technique known as:

Answer: Profit zoning

Profit zoning places high-margin items in the visual 'hot zones' of a menu — areas where eye-tracking research shows diners look most often.

Which pricing strategy sets a single price for a complete meal (entrée + sides + drink) rather than pricing each component separately?

Answer: Table d'hôte pricing

Table d'hôte (or prix fixe) pricing bundles a full meal at one set price, simplifying the decision and often increasing perceived value compared to itemized à la carte totals.

Research shows that when a menu lists items in a category, diners are most likely to order items placed in which positions?

Answer: First and last items

The primacy and recency effect means diners remember and order from the first and last items in a list more frequently than those buried in the middle.