It is not gouging , it is price discrimination.
they are targeting different groups of dinner at the different times.
It is the same as airlines selling seats at different prices.
Posted by
on 08/11 at 02:19 PM
Price gouging in Edinburgh
Monday, August 11, 2008
Jimmy Chung’s in Edinburgh occupies a prime location between Waverley Station and Prince’s Street - it appears to thrive on a fast flow through of customers eager for a quick fill of chinese food - it needs the high footfall to pay what must be a hefty rent. An obvious approach is to engage in some price gouging - serving fixed price meals at different prices according to the time of day - all prominently displayed as shown. I will use this with my introductory Economics students in a few weeks time.
1/ Why are lunchtime prices cheaper than in the evening?
2/ Why is lunch on a Friday / Weekend more expensive than earlier on in the week?
3/ Why is dinner on a Sunday £2 cheaper than dinner on a Friday?
4/ If they pride themselves on serving a traditional Scottish breakfast - why do they open at 11-45am?
5/ If you order a meal at 4.15pm is the restaurant required to serve you? And if you delay the trek to the buffet until 5.02pm - do you have to pay extra? (Apparently the answer is yes ... if you vacate the table after 5pm ... then you pay the evening prices!)
6/ Why do so many Chinese restaurants offer this ‘fixed price’ menu?
7/ Why 5.99? Why £6.99?
I am sure there are other better questions to ask - can blog readers suggest some more?
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Since the restaurant appears to be closed for half an hour 4:30- 5:00, it seems perfectly possible that the dinner buffet is entirely differently composed than the lunch buffet. Perhaps there are more expensive ingredients, more choices or even more courses which might justify the differential in price by reason of higher costs. In that, albeit unlikely, scenario this would be a case of price differentiation rather than price discrimination or “gouging?“
Posted by
on 08/12 at 04:00 AM
I’ll check the lunch and supper menus to see for any differences!
Posted by
on 08/12 at 05:12 AM
I’ve already explained my stance on price discrimination in the Madonna article so it’s unsurprising that I find it heartening a restaurant would have an insertable price sign, it suggests that the managers have some sense of economics and understand the importance of using customer flow statistics to find the market equilibrium price. A sign like that means that they’re flexible to change, are willing to experiment with various pricing policies and also reduces menu costs. I actually ate there Thursday lunchtime and the food wasn’t too bad, large range but a bit greasy.
Most of the price differences can be explained through supply and demand. More people coming in during weekends hence higher prices etc. I was surprised by the Sunday dinner being cheaper too, at first I thought it might have something to do with church or family time…? Having been to many Chinese buffets, I can predict that the lunch menu and the dinner menu don’t vary all that much - or at least not enough to justify a £5 increase. I put this down to interdependence upon other competitors. Everyone else charges more for dinner, so there is not really an incentive to cut prices too much - it’s not collusion but it’s something close to it. The price inertia makes me think that kinked demand curve theory may even apply here, demonstrating certain oligopolistic characteristics.
I’m hugely fascinated by buffets (in both senses) since it’s an *alternate* way of price structuring. I’m often surprised that they can keep in business considering the self-selection bias that exists for them. In America, many “buffets” actually ask you to pay by the weight rather than an all-you-can-eat at un prix fixe, may be the only way they can keep themselves in business. But I saw that Jimmy Chung actually has a chain of buffet restaurants all around Scotland so his corporate strategy of price discrimination must be working so far!
Posted by
on 08/12 at 05:54 AM
The all-day breakfast is served from 8-30am t 11.30am - but only in the central Edinburgh location
Another interesting snippet - Jimmy Chung does indeed run restaurants in different parts of Scotland (and also in Dublin) and they charge different prices in their restaurants as this evidence illustrates: Cheaper in Aberdeen and also away from the tourist trapof Wavereley Street!
Edinburgh - Grindlay Street
Lunch
Monday - Thursday: £5.49 per person
Friday: £6.49 per person
Dinner
Monday - Thursday: £10.99 per person
Friday - Saturday: £11.99 per person
Sunday: £8.99 per person
Edinburgh Waverley
Lunch: Monday - Thursday
£5.99 per person
Friday - Sunday
£6.99 per person
Dinner
Sunday:£9.99 per person
Monday – Thursday: £10.99 per person
Friday - Saturday: £11.99 per person
Aberdeen
Lunch
Monday - Thursday: £4.99 per person
Friday - Sunday: £5.99 per person
Dinner
Monday - Thursday: £9.90 per person
Friday - Sunday:£11.90 per person
Posted by
on 08/12 at 06:21 AM
