Price Presentation Influences Check Averages, New Cornell Research Shows
Dollar Signs May Focus Patrons on the "Pain" of Spending, Restaurant Industry Research Suggests
Ithaca, NY (PRWEB) May 10, 2009 -- A study from Cornell University has found a new wrinkle in one of the restaurant industry's longest running debates--how to present menu prices to encourage the best check averages. The new study, from Cornell's Center for Hospitality Research suggests that guests spend more, on average, when menu prices are presented without dollar signs or the use of the word dollar. The restaurant industry research study, "$ or Dollars: Effects of Menu-price Formats on Restaurant Checks," by Sybil S. Yang, Sheryl E. Kimes, and Mauro M. Sessarego, is available at no charge from the center, http://www.hotelschool.cornell.edu/research/chr/pubs/reports/2009.html.
"Our findings were a surprise," said Sybil Yang, who is a doctoral candidate at the Cornell School of Hotel Administration. "The theory predicts that the numeral-only approach would show lower spending, instead of higher spending." The study was conducted during lunch at St. Andrew's, the restaurant at the Culinary Institute of America, in Hyde Park, New York. The restaurant is operated by students under the direction of Sessarego, who is an associate professor at the Culinary Institute.
"One theory to examine further is whether references to dollars, in words or symbol, reminds people of the 'pain of paying,'" said Kimes, who is Singapore Tourism Board Distinguished Professor of Asian Hospitality Management at the Cornell School of Hotel Administration. The study compared sales for menus with three price formats: a dollars and cents numerical format with a dollar sign ($00.00), a numerical format without a dollar sign (00.), and written-out prices (zero dollars). The researchers caution that their findings may apply only to lunch at this particular restaurant, but it seems clear that menu-price formats do influence customers' spending, both in terms of total check and average check.
The restaurant industry research report concludes: "As much as we might like to believe that we can earn a quick buck by changing the type and presentation of our menus, it is clear that operational factors have a much larger impact on purchase behavior than price typography does. Controlling for other factors, however, we saw a significant spending difference for menus that presented prices as numerals only."
Thanks to the support of the Center for Hospitality Research partners listed below, all publications posted on the center's website are available free of charge, at www.chr.cornell.edu.
About The Center for Hospitality Research
A unit of the Cornell School of Hotel Administration, The Center for Hospitality Research (CHR) sponsors research designed to improve practices in the hospitality industry. Under the lead of the center's 77 corporate affiliates, experienced scholars work closely with business executives to discover new insights into strategic, managerial and operating practices. The center also publishes the award-winning hospitality journal, the Cornell Hospitality Quarterly. To learn more about the center and its projects, visit www.chr.cornell.edu.
Center Senior Partners: American Airlines Admirals Club, General Growth Properties, Inc., job.travel, McDonald's USA, Philips Hospitality, Southern Wine and Spirits of America, Inc., Taj Hotels Resorts and Palaces, and TIG Global
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