My RestauRANT: Why Are We Paying a 900% Markup on Food?

When eating out, what do you look for? Cost, cleanliness, healthy food options? I’m still shocked by the price markup at restaurants, which is why I started thinking about other reasons to eat at home over going out. You can save money, ensure your table is clean, keep your calories in check, and do all this in less time than it takes to go to a restaurant.

Last night, I dropped $90 on about $15 worth of food. Why? Because I went to a restaurant! Going to a restaurant sounds innocent enough, but getting into this habit can kill your bank account!

Many independent restaurants aim for a 300% markup or four times the cost of raw ingredients! The Wall Street Journal even found tuna dishes being marked up 900%! In other words, I could eat four meals at home for the price one at a restaurant. You’ll often see pasta dishes for $14. I could make a giant pasta dish for easily <$1 using smart grocery shopping tricks.

And those prices don’t include the tip! I’m not against tipping well, but I’m a pretty easy customer. Having a waiter sit down a few plates and refill my water glass once means my tip of $16 for the meal last night was a pretty darn good hourly rate. Last night, the waiter interacted with our table for about three minutes total. If a person worked just four hours a day, five days a week at that rate, they would earn $332,800 in one year.

Okay, restaurants are expensive. Every knows that. It’s what you pay for sitting down and getting your choice of food sat in front of you. But there are some other things — things more important than money — to consider before making (or keeping) restaurant hopping a habit.

Cleanliness of the Restaurant

It bothers me something fierce when a restaurant isn’t clean. Sliding into a booth and finding bits of food waiting there for me is terrible. This always seems to happen to me. Oh, and I never get ice in my water — for sanitary reasons. (But I also despise ice because I don’t like straining my drink with my teeth or using a straw.) Here’s how to tell if your favorite restaurant is clean.

Calories at a Restaurant

Restaurant chains with 20 or more outlets must post calorie counts. That’s great. In my opinion, it’s something that should be considered before tucking into a meal. There’s a Chinese place I used to eat at a lot. I recently found out nearly every entree has 2,000 calories! For me, it’s not worth running for hours just to burn off a plate of sesame chicken.

Unfortunately, many restaurants use cheap calorie-ridden ingredients because making your meal tasty for cheap is the goal. But now that chains have to post calorie counts, they are offering healthier options. No longer can they only focus only on “flavor.” Hopefully the calorie-count law for chains will force independent restaurants to reveal their stats as well.

At home, I like seeing exactly what is adding flavor to my food.

The Time It Takes to Eat at a Restaurant

Is it just me or does going to a restaurant actually take more time than eating at home? By the time you get ready to go, bike/drive there, get a table, order, get served, eat, pay the bill, and journey back home hours have passed. Fast food is garbage, so I don’t really consider it much. Cafe’s can be pretty tasty, healthy, and quick enough. But still, it seems to me that finding a quick meal idea on and turning on the oven is much faster. Maybe I’m just a homebody?

End of RestauRANT

All through high school, I worked at a local restaurant. It was fantastic! So, yes, I believe restaurants do have their place. They can offer quality food and be fairly affordable. But I cannot see dining out over and over without special occasion: dinner meeting, good news, family in town, Saturday night with friends, on vacation, trying a top-rated restaurant, etc. Eating at a restaurant, for me, will never (never say never?*) become an unconscious habit.

Last night’s meal (including tip) cost more than I usually spend on groceries in a month. But the reason I went downtown for a fine meal was because it was part of last year’s Christmas present to my parents (we’ve been busy!). My parents loved the restaurant, it was super clean, offered healthy options — all indications of a great place. I do not regret the decision one bit. But, seriously, restaurants are ridiculously expensive.

*That’s a Ms. Frizzle quote from “The Magic School Bus,” not a Justin Bieber quote.

Related Article: How I Spend Just $75 per Month on Groceries

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  • There have seen a few comments about food that’s not easily done at home. I find that interesting cause I used to go out for Chinese all the time. Till one day I was broke but wanted Chinese food so I looked up online how its done and thanks to YouTube I’m told my egg rolls and potsickers are amazing. My family begs me to make them for birthdays and special occasions. Just goes to show you can shell out cash for someone else to make it or put in a little time and learn to make it how u want. Dont be afraid to change the recipe to suit you. I never make something exactly the same twice. 🙂

  • Thanks for the post suggestion. I had a good laugh when you realized your entree was around 2,000 calories. About a month ago I had a slice of cheesecake and I told my friend this is worth every extra minute I was going to need to spend on the treadmill. It was! 🙂 I’m right there with you on not making a habit out of eating at restaurants it can decrease your funds fast.

    • William Lipovsky says:
      First Quarter Finance logostaff

      Cheesecake, FTW! Best desert in my book. I wonder how many hours you had to workout for afterwards… 4? Work hard, play hard, amiright? lol. One time for fun me and a friend ate Hershey’s kisses while we ran on a treadmill. No way could we burn off the calories fast enough!

  • We used to go out for pizza, which is also a crazy markup for dough and a few veggies (we don’t have meat because pizza meat is disgusting) so I tried to make pizza and made some pretty good one so now if we are stuck out, eating greasy pizza is not pleasant anymore. The nearest restaurant is 20 miles away now so I try to make new dishes and after a few tries it tastes better at home. In the US we went to a lot of China buffets but never ate the chinese dishes with sauce, only shrimp and seafood. I read they put extra oil and sugar in the sauce so you fill out faster.

    • William Lipovsky says:
      First Quarter Finance logostaff

      Oh, yeah. Sauce = hidden calories. Plus, typical Chinese food in America is silly enough already. It’s hard to stay full after eating it. It’s because of all the simple carbs and MSG.

  • I guess people going out to eat will continue this upward trend of markup. We’re not helping the situation by supporting the businesses 🙂 I like to go out to eat but enjoy this rarely these days because I’d rather see my money be spent elsewhere.

    • William Lipovsky says:
      First Quarter Finance logostaff

      Me, too. I have a lot of other wants on my list ahead of restaurant food (which really, isn’t that tempting of a want).

  • I nearly always prefer what I can make at home over what I can eat out, especially when I’m looking for something healthier and the menu options are slim. It kills me when I think about how cheap something would be at home versus buying the same thing in a restaurant!

    • William Lipovsky says:
      First Quarter Finance logostaff

      I’m always so offended when the healthy options are limited. Apparently you and I are in the minority. 🙂

  • I try to limit my dining out to the point where I only do it if there’s a secondary purpose, such as meeting up with someone who I haven’t seen or spent time with in a while. That’s often what people like to do – “grab a bite to eat”. I almost never go out on my own. I’m more likely to spend too much on smaller food / beverage purchases, such as a quick stop at Starbucks. I do limit that to a max of once a week, but that still adds up fast!

  • Twice a month, at most! Mr. Tre is on a low sodium diet and we’ve found that he feels ill after eating at most restaurants. Takes the fun out of eating out 🙁

  • My fave experiences is dining out but I don’t do it as often as I used to. I’ve learned some clever ways to do so. It’ll always cost more than eating at home but I chose to keep some pleasures. The one thing I am very mindful of is going out with friends who love to split the checks evenly even if I only had an $8 salad with no appetizers or drinks.

  • We used to eat out weekly. We had a favorite Chinese Buffet. The food was fabulous and plentiful. I was even able to get over the embarrassment of my husband’s multiple (more like hyper multiple) treks across the restaurant for more food. But we were never happy spending the money, so we cut back to once a month, then every few months, then twice a year. The last time we went, the food was terrible. The next time we went, it was even more terrible. They must have lost their good chef or cut back on quality ingredients or misplaced their recipes … I dunno. I can tell you this though. We’ve saved a LOT of money not eating out. It got easier and easier to stay home every time a gross story would be reported about shenanigans in a restaurant kitchen. I won’t elaborate, but I’m sure y’all remember some of those stories. Thank God my husband is a lover of food, a fantastic cook, and he loves doing it. I just wish he loved cleaning up afterwards as much. Nothing ruins a great meal for me like having to clean the kitchen and the dishes afterwards! That’s what I liked about eating out. 😛

    • William Lipovsky says:
      First Quarter Finance logostaff

      The Chinese food probably kept getting worse because your bodies kept getting more accustomed to quality food!

      I want one of those commercial dishwashers. It would making cleaning up a breeze! Those things wash dishes in like 1 minute, no matter how dirty!

  • We used to go out to eat SO often. I loved not having to cook and clean up for once, and the kids loved getting junk food. 🙂 The Chinese buffet was our favorite. Once we got our financial selves together, we realized the major league waste going out is. It crosses our mind still, as I love me a nice Ribeye, but once I envision that cash going out the window, I happily head to the freezer for our $3.50 a pound grass fed beef from the local butcher. 🙂

  • I used to dine out way too much. I didn’t want to cook and I just wanted something made for me, but by the time you get there and sit down, it does end up taking just as much time as cooking! Luckily, I married a guy who is an excellent cook and actually enjoys it, so now I prefer eating at home. Dining out is pretty rare for us these days.

  • RestauRANT–hah! We don’t eat out much at all anymore. Really only for very special occasions (like Mr. FW’s bday in August) or Father’s Day (we took my parents out to lunch in June). That’s about it for us–it’s just way too expensive. However, I love it. I adore eating out so very much! Cambridge and Boston have incredible restaurants and many are within walking distance of our house. Temptations! But, we stay strong and stay home. It helps that Mr. FW is an amazing cook :).

    • William Lipovsky says:
      First Quarter Finance logostaff

      When I was in Boston a few years ago I was obsessed with making every restaurant stop a memorable one. It was part of my internship so we had to eat out every meal – and we got to pick where. I actually saved business cards or coasters from each restaurant. They were that good. The cannoli’s at Modern Pastry were especially memorable!

      You’re so smart to have married an awesome cook! I need to find one! 🙂

  • Hi Will

    Everyone eats out so much! We eat out only about once every 5-6 months and usually only because that’s when our friend comes to visit and treats us to a meal out!

    I am horrified by restaurant prices but even more so by pub prices and have worked in both so I know that quality etc isn’t all it’s cracked up to be! Who wants to pay for food that’s been zapped in a microwave but’s being sold for £12.00? And those giant tubs of mayo I’ve seen being delivered, they horrify me!

    Nope – dine in only for the hubby! As much as he hates it, our weakness is a cheeky delivery pizza occasionally, but it’s cheaper than a meal out and I usually only eat a slice or two so can ignore the horror of the pizza ‘kitchen’!!

    Great RestauRANT! 🙂

    • William Lipovsky says:
      First Quarter Finance logostaff

      I know, right?! My friend worked in a fairly expensive restaurant chain. They had a wall of microwaves in the kitchen! They only had a grill to sear marks into the steaks before throwing them in a microwave!

  • Very good rant Will. I find it odd sometimes how I would fight against paying for high quality food at a grocery store and then be tired of everything we have for food options and eat out. So from time to time, maybe it is better to pony up for an expensive at home meal, because it is cheaper than paying a 300-900% premium on something probably of lesser quality anyways.

    • William Lipovsky says:
      First Quarter Finance logostaff

      Thanks, Kipp. Normally I don’t like to rant but I felt it to be an appropriate topic for one.

      That’s so true about buying finer groceries and skipping restaurants. That helps rid the temptation for me. I don’t buy that fine of groceries but still.. eating Ramen each day would make me beg for Olive Garden.

      Plus, getting quality ingredients at home is cheaper than a low-quality restaurant meal.

  • I spend more than I care to admit on restaurants, but I love the experience. Travel and dining are my two favorite things to spend money on. That being said, if I’m going to spend that much on marked up food, I like it to be food that I couldn’t otherwise make at home. For example, there’s no way I’d ever be able to recreate the dishes of the Indian restaurant down the street from me. That’s why it’s my go-to place! On the other hand, I avoid places like Panera Bread, because I could make a sandwich at home, nawmsayn? Just my personal measure for dining out.

    • William Lipovsky says:
      First Quarter Finance logostaff

      YES! A dish that cannot be easily replicated at home is a must when I pick a restaurant! That way you’re paying someone for their skill rather than just the cost of food/service.

      And Indian food, FTW. Yes. Now I’m hungry.

  • We each out about once a month. I enjoy the time off from cooking and I try to choose healthier restaurants. But I just take it for what it is. A night off from cooking. lol

    If you choose a white tablecloth restaurant you might find healthier options with less calories. Except for Maggianos. I stopped eating there after I checked the nutrition on a simple bowl of soup.

    • William Lipovsky says:
      First Quarter Finance logostaff

      Restaurants are super sneaky about what they shove in soup. What’s especially scary is a few restaurants have healthy-looking options that are even worse than the steak-and-potato options. I know McDonalds used to have a salad that was worse than a Big Mac.

  • Stefanie says:

    I LOVE restaurants, haha. I also have a couple hundred options within a mile radius of my apartment, many of which are surprisingly cheap- though still more expensive than groceries.

    Speaking of pasta, a new place opened up caddy corner and they do $9 pasta dishes. Still more than a dollar, except for the fact that I couldn’t make a sweet homemade pear gorgonzola ravioli if my life depended on it.

    • William Lipovsky says:
      First Quarter Finance logostaff

      THAT point is HUGE! The best restaurants serve dishes that can’t be easily replicated by just anyone at home. Whether it be a skill that at-home amateurs don’t possess or simply the time it takes to create the recipe. Those restaurants earn my respect.

      $9 pasta in NYC? When I go there, I’m gonna re-read your blog the week prior. Gotta remember some of those deals you know about!

  • I love to eat out and I know personally how much the markup is since I have worked in management for many restaurants in the past. I just enjoy the atmosphere and finding good food. That being said, the markup can be pretty crazy, especially for fine dining.

    • William Lipovsky says:
      First Quarter Finance logostaff

      Yeah, the finding good food part is great. I just hate it when I go to a restaurant and the feed me dishes that can easily be replicated with a trip to Walmart and a microwave. :/

      And the atmosphere is definitely something of value. I have to constantly remind myself it’s not just the food they are charging me for.

  • Going to a restaurant for a nice dinner should be a special occasion! I too took my parents out this month to thank them for helping me move. They loved it, so it was money well spent.

    My mom constantly looks on the internet for deals on sites like Groupon. There are some massive savings to be head when looking for a nice place to have dinner.

    Also, I shouldn’t have laughed as hard as I did at restauRANT. 🙂

    • William Lipovsky says:
      First Quarter Finance logostaff

      There are definitely discounts to be had! I love me some Groupon. I order a set of dishes from them once. They sent me 4 sets. I told them and they said I could just keep ’em.

  • Kassandra says:

    It’s nice to get together with friends/family over a nice meal at a resto from time to time but prices for resto food overall are just ridiculous. Dh and I travel for work and I often try to get a hotel room that has a kitchenette and near a grocery or convenience store so I can minimize the resto impact. Don’t get me started on the lack of cleanliness I’ve seen in some high grade restaurants and the bathroom…yuck!

    • William Lipovsky says:
      First Quarter Finance logostaff

      I hate going into a restroom and wondering, “Why is EVERYTHING wet?!?!”

      Smart move on the kitchenette. What hotel chains have them?

  • I’m glad that you at least enjoyed going out with your parents. I’ll be taking mine out this weekend as their anniversary is coming up. Aside from special occasions, I try to stay away. You’re very right that the restaurant process is usually longer than cooking at home, and overall, I personally would rather stay home. And I used to love the Magic School Bus!

    • William Lipovsky says:
      First Quarter Finance logostaff

      Yes, yes, I did enjoying going out with them. And can’t put a price on that, right?? I’m a good son. 🙂

      I’d rather stay home a lot of the time as well. Guess you and I are easy to please. 🙂

  • The markups at some restaurants is insane. I never understood how people go to a restaurant and order pasta. I’ve read that one of the best things to order at a restaurant is steak, because the markup is not that big.

    I eat at home as much as I can and when we go to restaurants is usually with a groupon!

    • William Lipovsky says:
      First Quarter Finance logostaff

      Well good then, ’cause my dad had a t-bone. Groupon is fantastic as well. There have been rumors for awhile now (I know someone who works there) that they will go under within a year. Hope those rumors don’t come to fruition.

    • William Lipovsky says:
      First Quarter Finance logostaff

      I’ve never heard ‘ranthopper’ before! But I’ve heard of ‘clever’ so I’ll take it as a compliment! 🙂