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

Page: 1 2

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