Differential Restaurant Pricing at Valentine's Day

Restaurants use differential pricing balance supply (restaurant capacity) with demand over more than just one night.

 

Differential Restaurant Pricing at Valentine's Day

Restaurants use differential pricing balance supply (restaurant capacity) with demand over more than just one night.

Differential Restaurant Pricing at Valentine's Day

Restaurants have a problem around Valentine's: Demand (customers that want to dine with them) on that one night generally exceeds capacity (their ability to seat and serve those customers. Meanwhile they are likely to have excess capacity (empty tables, underworked staff) immediately before and after Valentine's Day (many people aren't going to plan on eating out on February 13 or 15 if they know they have to eat out on February 14).

The ideal solution would be to have a smaller spike on Valentine's Day, and higher traffic on the other days before and after. They want to be at maximum capacity as much as possible. Differential pricing can help accomplish that.

The restaurant above promotes a Valentine's Day special at a higher price on Valentine's Day weekend (in this case Friday February 13 through Sunday February 15) and lower prices the week before.

This segments the buyers who place a high value on eating out Valentine's Day weekend from those who don't. Those that really want to dine that weekend will pay more, and the restaurant owner, who really can't increase capacity on those nights, generates more revenue from the higher prices.

Meanwhile those that are less concerned about the date can save money by dining during the week – increasing demand and making better use of available capacity during that period.

Some florists are have been employing this practice too – charging discounted delivery fees for orders delivered before Valentine's Day.

Discounting Valentine's Pricing For Florists Value-Based Pricing
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