THE BAD DEAL

Last September, Danny Meyer’s Eleven Madison Park reduced its seat count, upped its course count and raised the entry-level dinner price from $95 to $125. The 32% price hike was a daring move in a city recovering from the biggest financial downturn since the Second World War. A year later, the bet paid off. Last week, Eleven Madison Park was awarded the Michelin guide’s highest honor: three-stars. The dining room is booked solid. And the four-course menu, with enough amuses, intermezzos and petits fours to make one’s head spin, is still $125.

That’s why we at The Price Hike & The Bad Deal are highlighting Eleven Madison Park in our EVEN STEVEN series, honoring restaurants that keep prices stable for a year or longer amid rampant global food inflation. And that’s why we asked Will Guidara, Eleven Madison Park’s 31-year-old general manager, a few questions about prices — recall that Guidara and his chef, Daniel Humm are in the process of buying Eleven Madison Park from Danny Meyer, so these guys are playas in their own right. Here are the highlights from our email interview with “Mister G.” Read through to find out why EMP doesn’t charge supplements, how mushrooms can be pricier than foie gras, and whether the menus (there’s also a $195 tasting) will need PRICE HIKES.  

Has it been a struggle to maintain the $125 price point, or did you know last year that you’d need a higher initial price to hedge against future food price inflation? It has definitely been a struggle. For us as a restaurant, one of the principles we most focus on is that of maintaining good value. A fine dining experience can be very expensive, but we want the entry-level price to be accessible to as many people as possible. Regarding setting our prices higher than necessary to hedge against future inflation, no. Our commitment to providing good value implies that we increase our prices only when we have to and only by an amount that will allow us to continue doing what we’re doing…In addition, because we are committed to supporting local farmers, we have been able to eliminate such a big part of what is rising food costs, which is, of course, the transportation of that food across the country or overseas.

Thomas Keller’s Per Se, at $295, charges $40 extra for foie gras, while Eleven Madison Park, at $125, doesn’t ask for a penny more. In fact, EMP rarely has supplements. Wouldn’t “add-ons” help you give frugal diners a price break, while high-rollers would pay extra for an extra-luxurious experience? For a long time, supplements were a part of our menu. Items like foie gras and lobster, for example, came with a $20 supplement. But after our remodel in 2010 and with the introduction of our new menu format, we decided that we would do away with supplements altogether (the exception being white truffles during the fall and winter truffle season.) We removed the supplements because we wanted to remove as many of the transactional elements from the dining experience as possible. In other words, we want all of our guests to be able to experience the menu without having to make so many price-related decisions.

When guests book a reservation with us, we tell them that our menu is a four-course prix fixe at $125 per person. The last thing that we want is for them to show up and realize that if they can only afford to spend $125 on food, there are several items that won’t be available to them. In the interest of full disclosure, not having the incremental revenue that comes from supplements has been a challenge, but what most people don’t realize is that some of the most expensive ingredients are not necessarily foie gras and lobster. Things like morels and matsutake mushrooms and porcinis can be more expensive than many of the most expensive proteins.

Has any particular ingredient been hurting your bottom line? With the format of our menu, we have the flexibility in the kitchen to explore a wide variety of ingredients from one day to the next. Ingredients that travel the greatest distances tend to be the most expensive. Iranian saffron, for example, can be exorbitant, particularly because of the shipping and customs. But because we source as many of our ingredients as possible locally, we have been able to avoid many of the expenses related to that.

One of the biggest factors that increases our food cost is the specificity that we are looking for. For example, our ducks are grown for us to a specific size. And we are constantly looking for the most exquisite produce at the height of its ripeness. For example, we had a cucumber dish that included baby cucumbers with their blooms still attached. Things like that can be very expensive but are crucial delivering a world-class meal.

In a world of scarce resources, prices, in the long run, will always have to go up at any restaurant. When will you make your next upward price move? We will, sometime in the future, have to raise prices, but we’re trying to postpone that as long as we can.

Is Eleven Madison Park Profitable? Yes. 

When you raise your price, even by a dollar, you’re statistically going to lose certain clients at the margin and gain others. Tell me about some of the clients you lost when you raised the price to $125 last year, and tell me about the new clients that you gained as a result of not just hiking the price, but of overhauling the restaurant. To be honest, where we’ve lost guests has less to do with price than it has to do with time. As our restaurant has evolved, the dining experience has gotten longer at lunch as well as at dinner, and some guests simply don’t have the time. The clientele that we have gained because of this are the people that are not just here for a meal; they are here for an experience.

What are your thoughts on becoming a “service included” restaurant like Per Se, where all prices reflect a service charge? I’m in the minority in supporting included service, as it makes it easier for me, the diner, to calculate exactly how much I’m going to spend. Service included has, as you point out, many advantages, both for the diner and for the restaurant. But as a restaurant, one of the main elements that we strive to embody is that of allowing our guests to have as much control over their experience as they want to have. We also strive to be a definitively New York restaurant, meaning that we not only use local ingredients and take inspiration from classic New York dishes but also embrace what we feel New Yorkers want in terms of service and things like tipping. And for now, we feel that most New Yorkers are most comfortable deciding for themselves how much they want to tip in response to any given experience — Will Guidara. 

Source: The Price Hike/The Bad Deal (Photo Credit: Nathan Rawlinson).