Interesting story in the New York Times about a Los Angeles restaurant called Everytable, which has two locations - one in South LA and the other in more affluent downtown - and also very different prices on their menus.
According to the story, "The big price difference represents an unusual experiment to address the persistent issue of limited food choices in poorer neighborhoods around the country. The higher prices at the downtown store are effectively meant to offset smaller profits at the other location, making the lower-priced restaurant more economically viable."
While the owners resist the notion that one restaurant is subsidizing the other, they concede that patrons at one location "are helping to underwrite sales of the same nutritious meals they are eating in neighborhoods where such food is typically unavailable because no one can afford it." Which is sort of the definition of a subsidy...
"Many other businesses, including restaurants, charge different prices for the same thing," the Times writes. "A McDonald’s in Midtown Manhattan, for example, is more expensive than one in Dayton, Ohio. But rarely is the price for the same food nearly double the price just a jog away."
The story goes on to say that "Everytable grew out of Groceryships, a nonprofit that ... provides families in South Los Angeles with fruits, vegetables, seeds, grains and other fresh health foods for six months, during which they attend group sessions where they learn cooking and shopping skills and work on techniques to change eating habits."
According to the story, "The big price difference represents an unusual experiment to address the persistent issue of limited food choices in poorer neighborhoods around the country. The higher prices at the downtown store are effectively meant to offset smaller profits at the other location, making the lower-priced restaurant more economically viable."
While the owners resist the notion that one restaurant is subsidizing the other, they concede that patrons at one location "are helping to underwrite sales of the same nutritious meals they are eating in neighborhoods where such food is typically unavailable because no one can afford it." Which is sort of the definition of a subsidy...
"Many other businesses, including restaurants, charge different prices for the same thing," the Times writes. "A McDonald’s in Midtown Manhattan, for example, is more expensive than one in Dayton, Ohio. But rarely is the price for the same food nearly double the price just a jog away."
The story goes on to say that "Everytable grew out of Groceryships, a nonprofit that ... provides families in South Los Angeles with fruits, vegetables, seeds, grains and other fresh health foods for six months, during which they attend group sessions where they learn cooking and shopping skills and work on techniques to change eating habits."
- KC's View:
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I'm less interested in this story because of what essentially is a form of zone pricing, which is incredibly common in much of the country, than I am intrigued by the idea that people are looking for ways to provide better, more nutritious food to people who might ordinarily be unable to afford it. That's a worthy effort ... and if it takes finding a way to subsidize it, then that's fine with me. Otherwise, people might think that fast food was their only option. Which it almost never is.
