Dessert Economics

Growing up, my family rarely went out to dinner due to financial constraints, and if we did for a special occasion, we never ordered dessert. My father believed desserts were a waste of money, and my mother didn’t have much of a sweet tooth.

Economist Tyler Cowen tells The Washington Post that desserts offer restaurants the thinnest of margins:

Food in general is tough to make money on. Restaurants have long relied on the mark-up they tack onto drinks, not grub, to boost profits. As food costs soar, that reality has only become more true, because there’s a limit to how much people are willing to pay for different parts of their meal. For many mid-scale restaurants, that limit is $30 for entrees, no matter the ingredients, Todd Kliman noted recently in the Washingtonian. For desserts the ceiling is much lower, and much less flexible, says Cowen.
“Dessert needs good ingredients to taste good, but you can’t psychologically convince people to pay even $20 for dessert,” Cowen said. “You can’t really go cheap on it, but you really can’t charge extra either.”

Cowen also points out that parties that tend to linger over desserts after a meal can also slow down turnover, which is often essential to a restaurant’s bottom line. He also notes on his blog that places like Starbucks, which serves coffee and pastries (post-meal staples) have become “a more popular and durable model for injecting sweets and cream into the body.”

As for me, I love ordering desserts after a big meal. A part of it is probably psychological — a way to reclaim something that was denied to me during my childhood. But, also, just look at that crème brûlée.

Photo: Adriel O. Socrates