Red, yellow and green is a familiar colour code.
And customers should be concerned about the role they play when red and yellow health inspection cards pop up in the windows of Centretown’s ethnic restaurants.
It is my experience from running an Indian restaurant in Toronto that customers put undue pressure on these businesses to keep their menu prices artificially low.
A menu price should reflect a maximum 28 per cent food cost and a 25 per cent profit margin. The remaining 47 per cent covers everything else, including staff, take-out containers, rent, licensing fees and laundry.
Ceylonta, a South Indian and Sri Lankan restaurant on Somerset Street West, had a flurry of health inspection violations in June 2009, says Ottawa Public Health’s website.
The restaurant was inspected five times that month, says the website. Most restaurants don’t have five health inspections per year.
No violations were found during Ceylonta’s most recent inspection on March 1.
Ceylonta serves a shrimp dish in coconut-based gravy for $15.95.
This shrimp curry is very similar to, and the same price as, the one my restaurant serves. My food cost for shrimp curry is just over 30 per cent.
Even at the restaurant chain Red Lobster, dinner menu items that include the word “shrimp” are $18.75 and up.
The need for low menu prices – foisted upon them by customers – prevents many ethnic restaurants from balancing costs and forces them to cut corners. The first corners to be cut tend to involve staff.
A restaurateur forced to cut into their staff budget may hire cheap labour that may not know about food handling.
Unskilled workers might cut cooked meat on a red cutting board – meant for raw meat only – instead of on the appropriate brown cutting board.
This lack of knowledge can lead to health inspection violations.
Owners also need to cut costs on ingredients to maintain low prices.
The coconut cream, oil, caramelized onions, ginger, garlic and shrimp in a shrimp curry are expensive ingredients that are hard to find at affordable prices.
A business owner spending a lot of time looking for deals isn’t spending time supervising staff.
But hiring less knowledgeable staff is often the only way to pass on savings to customers without shrinking the necessary profit margin.
Searching restaurant review websites shows prices are a big factor for patrons of ethnic restaurants.
The review website Yelp reveals the contrast between how much customers are willing to pay for ethnic food and how much they’re willing to pay for western food.
The expectation is that ethnic food should be cheap, but still tasty.
A common complaint is that the food is too expensive or not value for money.
This all started with the quintessential ethnic restaurant: the Chinese take-out place.
A take-out restaurant has much lower overheads than a dine-in restaurant and can charge substantially less for food.
The business strategy of Chinese take-out is to do a large volume of sales rather than focus on offering high quality products. This model relies on low prices to attract customers.
But even if the food cost of a menu item exceeds the maximum 28 per cent, a cheap take-out place can still maintain a healthy profit margin because it’s attracting more customers.
Dine-in restaurants cannot match take-out prices. Nevertheless, customers demand take-out prices from dine-in ethnic restaurants.
But the reality is that ethnic food is not all cheap to prepare.
Diners need to realize that they’re putting themselves at risk by demanding unrealistically low prices.
Asking "does rice come with that?" is an unfair question.