Food & Drink: Pricing
The Lunch Price Index: How should you price your lunch menu?
When setting appropriate menu prices, it's vital to keep track of what people are willing to spend and what your peers and competitors are charging. Lunch prices vary vastly within the UK, our Lunch Price Index shows.
One of the beautiful things about iZettle is that you as a small business owner can keep track of your statistics with the free point of sale app. On a larger scale, we at iZettle can collect and summarize mountains of data from our users all across the UK. Here are some of the results.
Fancier lunch on the weekend
Having crunched the numbers from lunch hour sales in practically every city in the UK, we see some interesting facts. On average, Britons spend a little over £6 on lunch a typical weekday. But on weekends, hungry lunch-goers loosen up and spend over £7.
Cheap lunch in Manchester
Non-surprisingly, London lunches are quite expensive according to the Lunch Price Index. Londoners spend on average £6.60 on their lunch, while people living in Brighton for instance spend an average of £5.90 and people in York spend £6.30. And of the main UK city hubs, Manchester is the cheapest, with an average lunch price of £5.50 - 25% cheaper than in London!
And of the main UK city hubs, Manchester is the cheapest, with an average lunch price of £5.50 - 25% cheaper than in London!
Rapid growth in London
Grabbing lunch from quick-food establishments is on the rise, which hardly is astounding since we consider ourselves to have less time today. But the increase is mainly urban. Since 2009 lunch visits to quick-service restaurants in London have increased by 17.1%, according to BBC, while the rest of the country saw an increase with only 4.4%. The stressful situation for Londoners is most likely also the reason 52% decide to eat their lunches at their desk, compared to 38% in the rest of the UK.
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Chicken sandwich bonanza
So what do Britons actually eat? While experts and trend analysts clearly see that healthier food is on the rise, the London favorite lunch is still… a desk friendly chicken sandwich. According to NPD research, 10.9% of visits to quick-service restaurants during 2014 resulted in a chicken sandwich. Our data shows that a chicken sandwich can vary a lot in price, from £3 to £9 depending on where it’s sold.
Competition is crucial
So why is this interesting to you as a small business owner? Well, if you’ve read the Business Hacks post about the dangers of emotional menu pricing, you know that there are numerous aspects to take into consideration when setting your menu prices to achieve the desired profit margin. We will definitely dig further into this vast subject further on, but if you’re in any way performing a competition-based pricing, you need to keep track of what your peers and competitors are doing. If you know your benchmark, you can choose to stand out – as a premium or low-cost choice, depending on where you wish to position your brand.