Food writers and economists alike today were treated to social media feeds thick with links to James’ Surowiecki’s latest New Yorker column, which wrestles with the inexplicably high price of lobster dinners. As Surowiecki explains, restaurants charge more for lobster than the market dictates because people actually like paying a high price for luxury. Even though the wholesale cost of lobster has plummeted, customers still derive pleasure from shelling out for what’s perceived as a fancy dish – and the arbitrary fee gives restaurants an opportunity to frame their other dishes as relatively affordable.
What’s not covered in the column, though, is how lobster prices are printed on menus: Most high-end restaurant list lobster as “MP” or market price, whether or not the price has any relation to the market. While that coy pricing strategy is consistent with Surowiecki’s argument, it raises another question: Why is lobster the only MP item on most menus? The prices of eggs, corn and beef have soared in recent years, but it’s hard to find an MP plate of chili enchiladas.
“Lobster is one of those products that fluctuates a lot more than others,” explains Frank McMahon, executive chef at Hank’s Seafood Restaurant. “Lobsters, I’ve seen them at $6, I’ve seen them at $12.”
By contrast, McMahon says, the price of a pound of scallops might fluctuate by just one or two dollars over the course of a year.
Although Hank’s sticks to the MP convention — partly because it can’t easily reprint its menus, and partly because the unlisted price is a standard element of the traditional lobster experience, along with melted butter and a lemon wedge — McMahon says the restaurant rarely takes advantage of having the freedom to impose any price it chooses.
“I don’t think the price has gone up for a long time,” he says.
At Hank’s, two split chicks (lobsters weighing between one and one-and-one-quarter pounds) are priced at $40. The plate costs the restaurant about $20, making it one of the lower-margin items on the menu. Yet it could still function as a significant money-maker if the restaurant sold oodles of lobster, McMahon says. “I’d love to sell 100 portions,” he says. “But we sell 10-12 some nights. Other nights, we sell none.”
But Hank’s will always offer lobster, even if it goes unordered for a night or two. “We’re a real seafood restaurant,” McMahon says. “We have to have the seafood people expect.” When the cost of other ingredients becomes unpredictable, restaurants typically stop using them: Rather than list market price cherries during a disastrous cherry season, for example, chefs can just make their pies with peaches. But McMahon says he can’t do away with lobster or other popular fish, such as grouper.
“Everyone wants grouper here,” he says. “I have to have it on the menu, whether it’s local or not.”
Among the customers who want lobster, McMahon says a few of them are initially put off by the price tag. But most of them ultimately swell with the pride and pleasure outlined in Surowiecki’s story.
“When they see it’s four halves, it’s ‘how you doin’ now?’,” McMahon says.