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How “Service Included” Affects North End Grill’s Prices
The “service included” trend at restaurants is a fascinating one, and the argument for it is more compelling at establishments where the service is reliably top-notch—such as Danny Meyer’s. As of last week, there’s no tipping at North End Grill. Instead, prices have been raised to bundle in the cost of service. Below is spreadsheet comparing the old prices and the new ones for appetizers, entrées, and alcohol. Exactly how much they’ve increased depends on what you order—some items, such as the clam pizza and beer, took a harder hit. Wines prices varied more dramatically, at least according to the bottles I randomly chose. (I made an effort to select a range of prices, just to see if the more expensive bottles changed less.) The average increase for food and alcohol is 24%.
On the face of it, that’s more than the 20% you might normally tip. But you probably tip on the tax, too. So exactly how much more are you paying now? Here’s an example. Before last week, say your bill was $100, or $108.88 after the 8.875% tax; a 20% tip ($21.78) makes the total outlay $130.66. Today, that $100 bill at North End Grill is $124; add the $10.85 in tax and the total is $134.85. Overall, then, you’re paying 3.2% more now. It’s good for the staff, but the real winner here might be the government: Because it now gets its 8.875% tax on a higher amount, its revenues from North End Grill stand to go up by 25%.
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Nice analysis. Is this the first time you’ve ever generated a spreadsheet in Tribeca Citizen?
There was one in the Supermarket Price Check post (created by Adam, like this one), but I think that’s it. Spreadsheets are best deployed infrequently….
Don’t get confused fellow neighbors!!! This is just another excuse to increase prices to customers. Tipping is expected to be according to the service you recieve. If you get a really bad arrogant server, are you tipping 26%??? Also, on wine service, it takes the same amount of work to open a $40.00 as is to open a $800.00 bottle, the tip is very different on both examples.
Just for those servers reading this:
Gratuity= an overpayment made as a recognition to those who provide service beyond the expectation.
Restaurants in Manhattan have an exorbitant rent, we end up paying that rent to restaurant owners, fine, its the cost of living here. But now, they want us to pay for increases in their staff compensation and keep the rest for themselves. So, if this “new” scheme is successful we are only going to see more local shops close down because we have given them more excuses ($$) for landlords to increase rents.
Waiters, congratulations on recieving a wage increase and customers not being able to display their opinion on your quality of service.
Restauranteurs, good move! I also want my customers to pay for my employees.
Foodies, keep the cash coming! NYC is getting full of subpar expensive food.
I hear there is some wonderful decaf coffee these days
The restaurant ‘gratuity’ has always been a misnomer in the US. If you aren’t giving a server ar least a 15% tip you are penalizing them. You are taking the basic living wage out of a person’s pocket. Perhaps you’ve never worked in that industry, since you lack some basic empathy on the subject. Sure, it is not different to open a $40 bottle of wine from an $800 bottle of wine (although that’s not really even true in a serious wine program like you see in some high end places), but that is the deal you make when you go out to eat in this country. A restaurant tip is not an excuse for you to be a two-bit critic every time you eat – when it works it has become a way for you to show disapproval in situations where service is genuinely bad, or extra approval when the service is exceptional.
As far as North End and the other Meyer places go, if you have a bad service experience, complain about it to the manager (your reply makes me suspect you have no problem voicing your opinion in a restaurant setting). I think have enough integrity that they will accommodate you in some way. Frankly, I think this is a much fairer system. If something goes wrong with your meal the responsibility is shared by the entire restaurant, not just one poor server. Server issues are often the result of issues with the restaurant as a whole, and a bad night for the kitchen, or a room incorrectly booked by management can result in a server losing their livelihood for the night. I’m not sure if this will work in the end, but I like the idea, based on fairness alone.
Also, if you read Meyer’s rationale for it, part of it is that it allows wages to be distributed more equitably to “back of the house” staff such as line cooks. Tips or a portion thereof are typically pooled & shared among the ‘front of house” staff – they are not allowed to be redistributed to the line cooks etc I don’t think this is meant to work in your everyday Olive Garden… it seems more appropriate for high/higher end establishments – I don’t know if it will work but I think it will be very interesting to see.
North End Grill is one of my favorite places downtown and really hope it does not go South End Grill after this.
As for the fairness of the measure, it will be all on the hands and integrity of the owners.
Erik, love your quick analysis, thanks… I hate spreadsheets too but am glad you did this one because it shows quite obviously what North End is trying to pull under the guise of “looking out for their staff”. Figuring 6% goes directly into their pockets. Bad PR move. So, how long ’till they close their doors?
Not sure where the 6% number is coming from, but I do think that NEG’s intentions are entirely honorable. Plus, it reliably has the best service in the neighborhood (by which I mean generally, not just BPC), so I’ll happily agree to that embedded service charge — and I’d wager that most patrons won’t have a problem with it.
According to your chart if I read it correctly… and that’s a big IF LOL) they upped their costs apx 24% on average. In my mind, I’m figuring an average of 18% goes to their staff … leaving an extra 6% floating around, … unless you think they are giving the entire 24% hike in price completely to their staff. Patrons will not bat an eye, but I do wonder whether the restaurant will absorb any of the increase or give it all to their staff. That’s all. ;)
I would like to hear the actual servers chime in. Perhaps some sort of poll or a number of short interviews Erik? Though they may be reluctant for obvious reasons.
Count me firmly in the “suspicious” camp. I really believe whether intended or not it’s nothing more than the restaurant owners passing along higher costs. My guess is at the end of the day many, like myself, will end up leaving some sort of “extra” tip for service anyway. Hence a nice bump to the bottom line for all but the patrons.
The calculation for the tip should have been $20.00, not $21.78. You tip on a pre-tax basis.
Actually, I tip on the full amount, including tax, because I’m too lazy to look for the pre-tax amount.