"People set their expectation of taste partially based on the price—and it becomes a self-fulfilling prophecy. If I didn't pay much it can't be that good. Moreover, each slice is worse than the last. People really ended up regretting choosing the buffet when it was cheap," said David Just, professor at Cornell's Dyson School of Applied Economics and Management, and one of the study's authors.
If you want to know more about the economics of buffets, the following is an excerpt from a longer feature I wrote for Lucky Peach earlier this year on the history and economics of the buffet.
Buffet businesses are rife with secrecy: Hard numbers about profit margins are extremely hard to come by, and many business are scared you want to talk health safety or whom they get their raw materials from, and at what price—information they regard as trade secrets.
But the basic economics of a restaurant are like those of any regular business: The cost of inputs must be less than what customers pay for the outputs. The difference between the two is the profit margin. Full-service restaurants have to balance sales with what they spend on food and alcohol, labor, rent, and incidental costs.
The variables at an all-you-can-eat (AYCE) buffet are different from those at a traditional restaurant. The demand for waitstaff is usually greatly reduced: Customers line up to serve themselves. The kitchen staff cooks from a prescribed menu daily, and at places like AYCE shabu-shabu or Korean barbecue places, businesses save further on cooking costs as customers cook their own food as part of the experience.
Though buffet operations don’t have to deal with finicky guests sending their orders back to the kitchen (log that under incidental costs), they do have to deal with another kind of tough customer: the kind who want to bankrupt them with their stomachs.
“We specifically refer to our ‘all-you-care-to-eat’ items in this way because we do not want to encourage our guests to intentionally overeat,” says Kerry Kramp, chief executive of Sizzler. “Sometimes guests misperceive these types of promotions and they take it as a challenge to potentially overconsume. That is not what we hope for and the majority of our guests greatly appreciate the flexibility to have a little more of their favorite menu items. We never create ‘consumption challenges’ and that is why we basically refer to these as ‘all you care to eat’ versus ‘all you can eat.’ People can eat a lot of food if they are not feeling like there is a value to the actual item.”
Sizzler, once a buffet-focused chain, has moved away from that model since the 90s. But its salad bar remains AYCE, and Sizzler continues to offer special items such as steak and riblets that can sometimes still be purchased as AYCE. As far as dealing with those customers trying to “beat the buffet,” the maxim is this: It’s all about the average.