An Adelaide pub has broken down exactly how much profit is made from each chicken parmigiana it sells after punters pilloried the $33 cost of the Aussie classic.
Duke of Brunswick publican Simone Douglas said she was prompted to do the maths on the pub favourite after bad online reviews from disgruntled customers.
The price breakdown revealed that the $33 menu item made the business just $2.03 in profits.
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“We’ve had a couple of two-star reviews recently about the cost of our schnitzels, and it got me thinking. So, I crunched the numbers, and while it wasn’t shocking, it was definitely eye-opening,” The Duke of Brunswick said in a Facebook post.
“We’re not a big chain with gaming machines padding the profits — just straight food & bev.
“A family business using local suppliers, and what we do here is personal.”
When pricing menu items, restaurateurs and publicans don’t just need to consider direct costs such as the ingredients required to make each dish, they also need to consider all of the indirect costs involved.
It’s one of the reasons why restaurants that pay sky-high rent for ocean views also often charge significantly higher prices for their dishes.
Douglas told 7NEWS.com.au that her costs had increased up to 42 per cent since 2019.
The raw ingredients alone for the $33 chicken parmi and salad at The Duke of Brunswick, add up to just $10.05, according to he breakdown video posted by the pub.
That goes up to $10.29 when you factor in the serviette you’ll need to wipe the Neapolitan sauce and cheese grease from your chin.
Then, there are all of the other indirect costs to consider.
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For the wages of the staff who cook the meal, serve it, and then clean up afterwards, $11.73 is factored into the cost of the pub’s parmi, and another $2.24 is added on top for their superannuation, work cover, and the payroll tax the company pays for each staff member.
And for costs related to the pub itself, enjoyed for a lively atmosphere and proximity to freshly poured pints of beer, $3.02 worth of the parmi’s price goes to rent, insurance, gas, and electricity.
A total of 64c goes to licence fees, software subscriptions, marketing and promotions and accounting fees, and another 2c goes towards rubbish removal, repairs and maintenance, and replacements.
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A whole $3.04 is factored in for GST, and another 79c for company tax on profit.
As for the pub’s profit on the dish itself, Douglas said: “We are left with $2.03.”
That means the pub serves the parmis at a loss on “Schnitty Monday” when a chicken schnitzel goes for $21.
‘Playing field isn’t level’
Douglas told 7NEWS.com.au that pubs like hers, which don’t benefit from gambling profits, generally ran on a 10 to 15 per cent profit margin.
“We choose to operate an inclusive, community-driven venue without any forms of gambling — where the pub is the heart of the community.
“We do it because we love it and because we get to make a difference every day. It’s cliche but true.
“Large-scale operators and groups generally negotiate the suppliers down on price and add in purchasing rebates. That’s something smaller businesses don’t have the buying power to do.
“Couple that with a payroll tax on a labour-intensive industry, and the playing field isn’t level.”
She said that the business runs to be a sustainable offering for the community.
“We love what we do, and we are here for the long haul, we just won’t be buying a Ferrari any time soon,” Douglas wrote on Facebook.
Clapping back at cost criticisms
Many people were “oblivious” to the costs behind their pub meals, Douglas told 7NEWS.com.au.
“It doesn’t occur to them that a business budget gets squeezed just as much as theirs in a cost- of-living crisis,” she said.
“Price-point one-star reviews demoralise the whole team.”
But despite the occasional criticism, returning customers commented that The Duke of Brunswick’s prices are worth paying.
“Reckon it’s a fair price, especially given that your costs are higher because everything is gluten-free,” one person wrote.
“Won’t get a decent parma in Melbourne for much less than that.”
