They’re outright accepting less customers in favor of those willing to pay higher prices.
That’s great for a quarter, maybe a year, maybe 5. At what point does it catch up and you’ve trained everyone to stop eating fast food because you wanted to charge more than people can dedicate to food?
They’re outright accepting less customers in favor of those willing to pay higher prices.
This is exactly it. I have seen folks saying we are entering a new kind of economy: a kind of “whale economy”. After seeing it work for mobile apps and games, other normal companies are wising up to the fact that your revenue will be the same if you charge 10 times what you were and lose 9/10 of your customers as a result… but your expenses will be lower. less labor, less equipment, less materials, less time. The 1/10 who stay and pay the high prices out themselves as “whales”, the people who probably have enough money to never care and will probably just keep spending even if the prices keep going up and up and up.
The majority of us are about to become low value customers… and therefore, not have easy access to common goods and services any longer. This will make perfect short term sense to each company doing this, but will promptly collapse what’s left of our economy into ruin.
Fast food is already almost as expensive as regular restaurant food… the only benefit is the drive through for those in a hurry travelling through town. If it gets any more expensive it will be easier to just phone in your order at a regular restaurant for pick up.
I agree it sucks. But I can understand the rationale. At peak times, if people try to go to Wendy’s, and it’s too busy, they go somewhere else. At this point the demand is higher than supply. Clearly increasing cost will create more profit.
Long term they are probably hoping that people decide to not all come in a peak times, and the peak is more spread out. This way lines are never long enough for people to just say fuck this and then leave. Less lost sales = more profit.
In reality I can see people just not going, so I agree with you that long term they see less sales. But honestly who really knows, people can be pretty irrational.
I cannot fathom how no one else sees this. They’re trading low-value customers for high-value customers. Sometimes this makes sense. I did it when I had a little PC repair business. Low-value customers were a PITA and didn’t make me any money, not worth my time.
But maybe they’re smarter than you and I? Lemmy tells me cheap fast food is a right, as if there’s no other choice. If that’s how people are thinking and acting, instead of shying away from fast food prices? Fuck 'em. Let them pay.
PC repair is a low volume, high touch, high skill business. If you set aside a single $100 customer for a $500 one, it can work since both exist.
Hamburgers of the Wendy’s grade are a volume and convenience game. For every thousand $4 customers, can they replace them with 667 $6 customers?
I’ve noticed an interesting phenomenon in the last couple years. The cheapest options and biggest chains ramped their prices much faster than the places a notch or two better. The gap has closed enough that suddenly those “notch or two better” places are more competitive than before-- if it will be $50 instead of $30 to take the family to Wendy’s, why not stretch to $65 for get Five Guys or a local place instead.
They’re outright accepting less customers in favor of those willing to pay higher prices.
That’s great for a quarter, maybe a year, maybe 5. At what point does it catch up and you’ve trained everyone to stop eating fast food because you wanted to charge more than people can dedicate to food?
This is exactly it. I have seen folks saying we are entering a new kind of economy: a kind of “whale economy”. After seeing it work for mobile apps and games, other normal companies are wising up to the fact that your revenue will be the same if you charge 10 times what you were and lose 9/10 of your customers as a result… but your expenses will be lower. less labor, less equipment, less materials, less time. The 1/10 who stay and pay the high prices out themselves as “whales”, the people who probably have enough money to never care and will probably just keep spending even if the prices keep going up and up and up.
The majority of us are about to become low value customers… and therefore, not have easy access to common goods and services any longer. This will make perfect short term sense to each company doing this, but will promptly collapse what’s left of our economy into ruin.
COVID and recent financial policies changed our economy from “charge what it costs + a reasonable profit margin” to “what’s it worth to you?”
Fast food is already almost as expensive as regular restaurant food… the only benefit is the drive through for those in a hurry travelling through town. If it gets any more expensive it will be easier to just phone in your order at a regular restaurant for pick up.
I agree it sucks. But I can understand the rationale. At peak times, if people try to go to Wendy’s, and it’s too busy, they go somewhere else. At this point the demand is higher than supply. Clearly increasing cost will create more profit.
Long term they are probably hoping that people decide to not all come in a peak times, and the peak is more spread out. This way lines are never long enough for people to just say fuck this and then leave. Less lost sales = more profit.
In reality I can see people just not going, so I agree with you that long term they see less sales. But honestly who really knows, people can be pretty irrational.
I cannot fathom how no one else sees this. They’re trading low-value customers for high-value customers. Sometimes this makes sense. I did it when I had a little PC repair business. Low-value customers were a PITA and didn’t make me any money, not worth my time.
But maybe they’re smarter than you and I? Lemmy tells me cheap fast food is a right, as if there’s no other choice. If that’s how people are thinking and acting, instead of shying away from fast food prices? Fuck 'em. Let them pay.
PC repair is a low volume, high touch, high skill business. If you set aside a single $100 customer for a $500 one, it can work since both exist.
Hamburgers of the Wendy’s grade are a volume and convenience game. For every thousand $4 customers, can they replace them with 667 $6 customers?
I’ve noticed an interesting phenomenon in the last couple years. The cheapest options and biggest chains ramped their prices much faster than the places a notch or two better. The gap has closed enough that suddenly those “notch or two better” places are more competitive than before-- if it will be $50 instead of $30 to take the family to Wendy’s, why not stretch to $65 for get Five Guys or a local place instead.
No CEO gives a shit about anything beyond the next quarter.
And it’s driving our world economy into the ground.
And it’s driving our world
economyinto the ground.That is sadly more accurate.