your opinion on price / value / margins

A Convenience Store up the street from my house,  wants to add a Cheesesteak to his menu.

He wanted the sandwich to sell in the $5.00 range.

How does this sound:

9 inch Amoroso Roll
6 ounces sirloin steak (6 oz before cooking)
3 slices of white american (2 oz total cheese)
heaping  1/4 cup caramelized onions (approx 3 oz)
1 ounce red & green pepper strips

Total Food Cost =  $2.25

Suggested Sell =  $5.95

Gross Profit =  $3.70

Food Cost Percentage =  38%


We cooked off several sandwiches,  and they are absolutely delicious.

The meat to bread ratio seems 'spot on' balanced.

The sandwich weighs almost 13 ounces.


Your opinion on the price / profit ?


Thank you,

Tommy B

I think it is an excellent price considering some of the items found in other convenience chains in New Jersey. I believe a hard boiled egg at Quick Chek sells in the $2 range. There are a few 6 or 7 in.  cold cut sub options at $2.99 but they are cold cuts and it does not seem as though the total weight will break an arm. It starts to get tricky if you get above a certain price in the CS venue because while people are used to paying more for most thing like batteries or cough medicine  you also are in psychological competition with the association of other prepared selections often found at CS like roller dogs and burritos at around $1. At some point you start to lose people as far as willingness to spend above a certain amount for any prepared food in certain venues. They start to think about what else is "out there" meaning out of the store after a certain price. I would not go above $6.50 (if you need to go higher because of the 38% cost). That may be pushing it a little if the owner wants something in the $5 range.  Maybe try to negotiate a new price from suppliers due to the new larger current orders and the potential  larger larger  future orders if all works well.
 
Don't know what procedure is used on-site to minimize loss and make building as  easy as possible for the employees who might struggle with the process if new...or well just don't pay close attention....oops! Or if there are any pre-made holding factors that are potential loss factors at some point.  Important to keep the loss down at 38% cost (that is getting up there). I would promote the  potentially "unexpected" quality found with the selection and include the total weight in the ad for the "wow! that sounds like a great delicious subtantial fill up deal  for the price" factor. These things are not always anticipated at convenience stores but would be a welcome surprise amongst many of the other options commonly found within the same venue.
 

CCinNJ
 
I would promote the  potentially "unexpected" quality found with the selection and include the total weight in the ad for the "wow! that sounds like a great delicious subtantial fill up deal  for the price" factor. These things are not always anticipated at convenience stores but would be a welcome surprise amongst many of the other options commonly found within the same venue.
 

If you phrased it as "Over 3/4 lb. of food!", I think it would really have the "wow factor" since that is the way that Hungry Man Dinners push their products.

Thank you very much for the helpful information,  including the 'cautions'  that I need to be mindful of with this price point.

Excellent suggestions.   Thank you!

I promise to report the feedback within the next 30 days.

Hey Tommy, Great to see the business is moving along. Do the C stores do this from scratch on a grill, Grill meat, cook onions and peppers and top with cheese to melt???? I know in my area they don't have grills, most just have fried everything in hot boxes.........Bill
   

Hi Billy B,   thank you for the encouraging words.

It does feel so good to FINALLY,  after 14 years of "sitting on the shelf",  TOMMY B'S PHILLY CHEESE is finally up and running at several locations.

I think the C-Store market is a HUGE market for Cheesesteaks.

This C-Store,  in Lake Hiawatha NJ,   has a 3 foot, gas flat-top grill,   well-seasoned, ready to make some delicious cheesesteaks.

But most do not have a Grill with the necessary Fire-Suppression system,   so I am working very hard developing a  menu that can be served out of a Food Cooker/Warmer.


I'll keep in touch.

Thank you Billy B