Navigation Links
Restaurant customers willing to pay more for local food
Date:10/26/2010

Not only are restaurant patrons willing to pay more for meals prepared with produce and meat from local providers, the proportion of customers preferring local meals actually increases when the price increases, according to a team of international researchers.

A recent study of how customers perceive and value local food shows that restaurant patrons prefer meals made with local ingredients when they are priced slightly higher than meals made with non-local ingredients, said Amit Sharma, assistant professor, School of Hospitality Management, Penn State. The research will appear in the fall/winter issue of the International Journal of Revenue Management.

In the experiment, researchers first set prices for both non-local and local selections on the menu of a student-led restaurant at $5.50. When the price was the same for non-local and local food, customers showed no significant preference for either option. However, when the local food selection was priced at $6.50, or 18 percent higher than the non-local option, a higher proportion of the customers picked the meal made with local foods and ingredients, said Sharma, who worked with Frode Alfnes, associate professor, department of economics and resource management, Norwegian University of Life Sciences.

"This is partly good news for restaurants," said Sharma. "It shows that customers were willing to pay slightly more for a local dish, with the emphasis on 'slightly.'"

Customer preference for premium-priced local food has its limits, however, Sharma warned.

Once researchers raised the price of the local option to $7.50, or 36 percent higher than the non-local alternative, a higher proportion of customers chose the regular menu.

Value cues--signals that attract increased attention from consumers--may influence the customers' preference for the higher-priced local option. The results indicate that the main value cue of local food for customers is its freshness.

"The higher price of the local dish was an indicator of higher value," said Sharma. "So, customers were comfortable with a slightly higher price for the local food."

Sharma said the research could help restaurant owners decide how to set prices for local foods and estimate whether the potential to charge higher prices will compensate for the additional costs associated with adding local food to the menu.

"The study helps restaurants make decisions on whether it makes sense to offer local foods," said Sharma. "If local foods are a natural fit for some of these restaurants, then it would definitely be a good strategy to price the food higher because there is an indication of value with fresh food."

Sharma said another important finding of the research was that customers indicated they had no preference between restaurants that offered local foods and ones that did not.

The study of 322 customers was conducted at a training restaurant on a Midwest university that serves between 45 and 85 customers each day.

Researchers designed a real-time choice experiment to meet several challenges they anticipated from conducting an in-restaurant experiment. Customers who dine at a restaurant are less inclined to fill out long questionnaires. To avoid bias, the researchers asked questions only after the customers chose their food.

"We literally put the customers in the situation and let them choose," said Sharma. "Then we asked them why they made the choices they did."


'/>"/>

Contact: Matt Swayne
mls29@psu.edu
814-865-9481
Penn State
Source:Eurekalert  

Related biology news :

1. Landrys Restaurants, Inc. Announces Status of Acquisition by Tilman J. Fertitta and Tentative Partial Settlement of Delaware Lawsuit
2. DNA analysis suggests whale meat from sushi restaurants in L.A., Seoul originated from Japan
3. Study recommends better handling of milk in restaurants
4. Study examines calorie information from restaurants, packaged foods
5. Restaurant and packaged foods can have more calories than nutrition labeling indicates
6. WAND Point-of-Sale Solutions Integrate U.are.U(R) Fingerprint Biometrics From DigitalPersona for Quick-Service Restaurants
7. WAND Point-of-Sale Solutions Integrate U.are.U(R) Fingerprint Biometrics From DigitalPersona for Quick-Service Restaurants
8. Collexis launches community feature for academic customers
9. Digital Dining Customers Demand Fingerprint Biometrics in Point-of-Sale Technology
10. M2SYS Technology to Offer Desktop Biometric Technology to Kronos Customers
11. M2SYS Technology to Offer Desktop Biometric Technology to Kronos Customers
Post Your Comments:
*Name:
*Comment:
*Email:
Related Image:
Restaurant customers willing to pay more for local food
(Date:1/20/2016)... Minn. , Jan. 20, 2016   MedNet ... supports the entire spectrum of clinical research, is pleased ... 2015. MedNet,s significant achievements are the result of the ... iMedNet eClinical , it,s comprehensive, easy-to-use ... --> --> Key MedNet growth achievements ...
(Date:1/15/2016)... Jan. 15, 2016 Recent publicized breaches in ... find new ways to ensure data security and user ... and Android that ties a user,s ... it into a hardware authorization token. Customer service agents ... fingerprint on their KodeKey enabled device to verify their ...
(Date:1/11/2016)... SAN JOSE, Calif. , Jan. 11, 2016 /PRNewswire/ ... developer of human interface solutions, today announced that its ... display driver integration (TDDI) products won two separate categories ... including Best Mobile Innovator and Best Technology Breakthrough. The ... overall system cost, a simplified supply chain, thinner devices, ...
Breaking Biology News(10 mins):
(Date:2/11/2016)... , Feb. 11, 2016   BioInformant announces ... "Stem Cell Research Products, Opportunities, Tools, and Technologies – ... The ... the stem cell industry, BioInformant has more than a ... stem cell market, by stem cell type. This powerful ...
(Date:2/10/2016)... /PRNewswire/ - BioAmber Inc. (NYSE: BIOA ), a ... Mitsui & Co. Ltd., its partner in the ... investing an additional CDN$25 million in the joint venture ... 30% to 40%.  Mitsui will also play a stronger ... Sarnia , providing dedicated resources alongside ...
(Date:2/10/2016)... , Feb.10, 2016 ASAE is introducing a ... Management Companies (AMC) the option of joining or renewing ... fee determined by staff size, every employee in any ... ASAE and reap all available member benefits.   ... new organizational membership options will allow organizations of any ...
(Date:2/10/2016)... , Feb. 10, 2016  Matchbook, Inc., a ... fast growing biotech companies, announced today the appointment ... Strategic Advisor. Jim brings nearly 25 years of ... procurement, having spent nearly two decades in executive ... and Procurement at Genzyme and, most recently headed ...
Breaking Biology Technology: