Are You Eating the 10 Most Over-Priced Restaurant Menu Items?

by Christa Avampato on 28 August 2014 19 comments

Americans love to dine out. We spend an average of $1,000 annually just on going to lunch. In total, we each spend about $2700 annually in restaurants and on take-out.

And where I live (New York City), it's that much worse. So I decided to do a price comparison to discover the restaurant menu items that serve up the biggest cost difference from homemade versions. As a reference, I used the menus of my local, reasonably priced diners and mom-and-pop restaurants. If you eat out at more expensive restaurants, the price difference will be even more extreme. Here's what I found.

1. Pasta

Nothing could be simpler to prepare at home than pasta. Whether you buy dry or fresh pasta or make your own (as I recently started doing), pasta is generally a ripoff at most restaurants. My local Italian place serves its simplest and least expensive pasta dish for $10. I can make the exact same simple dish at home for less than $1.

2. Salad

Whether you buy your produce at the grocery store, farmer's market, your local CSA, corner produce vendor, or grow your own, a simple veggie salad is a dish you should avoid at restaurants, especially during the summer months when local fresh vegetables are plentiful. I tallied up what it costs to make a simple salad at home with ingredients from my grocery store, and it costs less than $2 for all of the ingredients. My local diner charges $9 for the same salad.

3. Wine

Wine is my drink of choice. A reasonably priced local wine bar in my neighborhood has wines at $8 by the glass and $34 by the bottle (a bargain compared to a lot of New York City restaurants). My local wine store, however, has these same bottles for $14 each. A bottle easily serves four good-sized glasses of vino.

4. Coffee and Tea

We are a country of coffee lovers. As many as 83% of Americans drink coffee and in total we consume 587 million cups of joe per year. Excluding Starbucks, local coffee shops, and the artisanal coffee retailers that tend to charge high per cup prices, I toddled over to my local diner to browse their coffee and tea selection. They cost a minimum of $1.55 per cup. Not bad, especially with free refills. Then I broke down what it costs to brew my favorite gourmet coffee and tea at home and found it only costs $0.25 for the coffee and $0.15 for the tea. Grab your travel mug and home brew your morning fix.

5. Juice and Sodas

These are items best bought at the grocery store. Juice is $3.50 per glass at my diner. Soda is $2.50 per glass. I recently bought 64 ounce bottles of each through Freshdirect for $2.50. Doing the math, a glass of either at home costs me $0.31. At the restaurant, stick with good ol' free tap water.

6. Dessert

Given my sweet tooth, I'm always tempted by the dessert case. My frugal ways help me to steer clear of ordering, however. A slice of pie, conservatively, runs about $5 per at my local diner. I can buy an entire 8-slice organic, fresh-baked pie at my Whole Foods for $10. If I bake that same pie myself, the cost for the whole pie is about the cost of a single slice at the diner.

7. Simple Sandwiches

When it's lunch time and I'm out and about in the city, I often crave the simplest sandwich. Grilled cheese, ham and swiss, and a classic BLT are some of my go-to options. Then I look at the menu of some of my regular cafe stops and at their least expensive, these sandwiches ring up at $6 each. That same sandwich costs less than $1 to make at home. Grabbing a simple lunch on-the-go for the sake of convenience and time certainly comes at a cost!

8. Egg Dishes

Eggs are a staple in my fridge and for $2.50 a dozen at the grocery store, they're one of the most nutritious bargains, too, at about $0.20 per egg. At my diner, an egg with a few potatoes and a couple pieces of toast will cost you $5. You don't even need your calculator to realize eggs are best consumed at home.

9. Baked Goods

I used to tell myself I was no good at baking. Turns out I just needed to realize that baking and cooking require a different focus. While in cooking you can fudge measurements of ingredients, in baking you can't. Precision counts. Once I realized that, I started baking regularly. No need to spend $2 to $3 per muffin at my local bakery anymore. I can quickly whip up a batch of 12 for that price. I just put them in a ziploc bag and pop them in the freezer to warm up throughout the week.

10. Pizza

For a long time I believed pizza was worth buying because pizzerias deliver that chewy crust I crave. Then a friend told me that a $10 pizza stone would transform my homemade pizzas into works of art. Now I whip up homemade pizzas, with all the toppings I love, for a dime a slice. Even my local $2 slice joint can't compete with the cost-savings of my pizza stone.

What's over-priced at your local eatery? Please share in comments!

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Guest's picture
Gregory Brown

A better question is what isn't overpriced.

Guest's picture
Guest

Fish, steak, things that are already expensive to begin. The profit margin on things like this are razor thin. What's also worth spending money on are things that involve a lot of steps and effort to make.

Guest's picture
Harrison

Wait...so what can I eat? There are several restaurants in my area that have all of these things on their menu.

Guest's picture
Lisa

Where did you buy the $10 pizza stone?

Guest's picture
tunaman

Just buy an unglazed tile from Home Depot for $2, even cheaper.

Guest's picture
sunshine343

This article has a major fault in logic--it only calculates based on raw ingredient price. When you factor in buying, prep, cooking, and cleanup time, then these aren't that bad. Consider a salad: a head of any type of lettuce takes 10 minutes to pull apart, thoroughly wash, drip dry, and cut. Then there's the wash and chop time for all the many ingredients we add. Shredding cheese can be a pain when you clean up. And while a bottle of dressing goes a long way, a premium selection of 5 can set you back $25 up front. Note, if you buy any salad ingredients prewashed and/or cut, then you're already approaching the made-to-order price.
Pasta can be easy and cheap to buy and cook, but a good sauce doesn't usually come from a jar and can easily take 60 minutes and $30 of ingredients to recreate.
Pizza seems like a waste at that price, but unless you have enough people you risk overeating or throwing away the portion you saved price on.
A good rule of thumb is that if you have 5 or more people eating the same thing, then you can save by making it at home (to the same quality level). If it's less than that, then you'd better off enjoying the time saved and the freshly prepared food to order.

Guest's picture
tunaman

THANK YOU! I get so sick of these articles, which don't address the cost of gasoline, water, electricity\gas and even my time spent cooking all this stuff. Sure I can make a lot of similar dishes at home for less... but to the same standard? No way. Just using pizza as an example, I could make the crust for less than $1, and spend less than $1 on sauce. But cheese, pepperoni, Italian sausage, olives, green peppers, onions... all that stuff adds up, and there's no way I can do it for less than, say, Pizza Hut can.

Articles like these also ignore all the other costs restaurants have. Sure, a pasta dinner might cost a restaurant $1 (or even less) in actual food costs. But chefs, line cooks, dishwashers, busboys, hostesses, servers and bookkeepers don't work for free. The restaurant has to pay rent, electricity, water, gas, insurance, heath care, waste disposal and advertising. They have to buy mops, buckets, cleaning supplies, plates, glasses, knives, spatulas and pots and pans. It's not like evil restaurant owners are spending $1 on your pasta and laughing at you as they deposit your other $9 into the bank. When you factor all the other stuff in, the restaurant probably isn't making that much off you.

Guest's picture
BooleanLog

strongly agree with this - article fails to adequately account for value added via labor and opportunity cost of the diner.

Guest's picture
Guest

Yes, I agree... How much is a person's time worth? either the person eating out, or the person(s) preparing and serving the food?

This is a question that can only be answered by the individual deciding whether to eat at home or eat out...

However, this article does not address the convenience of eating out, or any of the social factors involved in eating out that also has some type of value, albeit difficult to place a monetary value on.

Guest's picture
Guest

What are you doing with the salad for 10 minutes ? 5 minutes is more than enough to make any kind of salad for 4 people, no matter what, unless you are making dressing from the scratch, and even than I might going to make it in that time frame.
Pasta sauces similar thing. Though there is several sauces that actually need a lot of cooking, most of the sauces that you can find in local restaurants are made quickly.

Guest's picture
Simon Douglass

Entirely valid. On top of this you also have to factor in the energy costs (which here in Australia certainly add to the cost). You have gas to get to the supermarket and back to get the ingredients. Then water to clean all the vegies / boil pasta in etc. Then gas/electricity to cook everything (stove/oven/microwave/kettle whatever). Then extra electricity usage by the airconditioners to keep the house cool due to the extra heat generated by the cooking process (I live in the tropics so the airconditioner is on all year round). Oh and electricity to power the lights and extractor fan in the kitchen whilst cooking. Then water and detergent to wash everything up after cooking/eating. Plus electricity to run the lights/airconditioning/tv/stereo or whatever you require whilst eating, which would otherwise be turned off if eating out. Not to mention extra electricity for the fridges that are storing all the perishables that you bring home from the supermarket until you cook them, and then the leftovers after cooking. And depending where you live, maybe even parking fees to even go to the supermarket. Plus extra rubbish bags that you will go through because of all the preparation waste that will result in filling you bin faster. And perhaps foil or cling wrap for storing leftovers. Add all these items up and in Australia at least you're talking an extra $2-$3 per serve easily!

Guest's picture
Rob

I agree with Sunshine343, good points well made.

To an extent the OP is correct but ultimately, you either want to go out or you don't and if you don't. Feels a bit like saying "it's cheaper to walk everywhere than drive or take a cab".

I don't disagree that eating out isn't cheap but so many people are prepared to pay these prices that they are just in fact "the going rate" for that commodity.

Drinks and deserts are usually very overpriced but let's face it - who wants to just drink tap water when you go out for a nice meal somewhere?

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Guest

I go out to eat to enjoy the experience, not to squeeze every last nickel from my budget. If I order something I don't want because it costs the restaurant more to make, I've wasted my money. An odd way to live your life.

Guest's picture
Guest

$10 pies at Whole Foods?? In NY??

Guest's picture
EricKei

Having worked in restaurants (both fast food and 'real') in the past, I can vouch for all of those, with the caveat that Sunshine343 mentioned, that the costs only take raw materials into account --- except for pizza. I'm genuinely interested in knowing how to make a pizza that cheap o_O I'm not saying it's not possible, I'd just like to know how to pull that off myself! :)

For reference, when I worked at a national chain pizza joint, we paid (to corporate suppliers (no real choice, by contract)) $2 per pizza for the dough, $2 for the 2 cups of cheese, and $1 for the sauce (Sysco tomato sauce plus a spice blend) for a plain 14 inch pizza...in 1999. I think it's safe to assume that the costs have gone up since then. That's not including toppings.

On the soda note -- It's worse that you think. Our cost (in ~2001) for a 20-oz soft drink was SIX cents per glass, including they "syrup," water, CO2, and labor+fluids+power needed to wash the glasses. One good alternative for those who prefer to drink wine in restaurants is to bring your own and pay the Corkage fee (call ahead to make sure they allow this first!) -- still much, much cheaper than buying direct from the establishment, where the price they pay per bottle is often about what you pay for two glasses from it.

Guest's picture
Brian C

I think you've completely missed the point of going out. Going out is about sitting down and relaxing and having someone else do the work for a change. I think you clearly misunderstand the economics of restaurant dining. The cost of the meal isn't just the cost of the ingredients. You're paying for someone to prepare the food, server it to you, and clean up after. You may also be paying for the ambience, decor, and location. (Sure I can save a lot of money eating salad and pasta at home but I can't watch the sun setting into the ocean while I'm eating from my dining room!)

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Guest

As far as beverages go, at most restaurants what they charge for a glass of milk you can buy a gallon at the store.

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Guest

“The History of every major Galactic Civilization tends to pass through three distinct and recognizable phases, those of Survival, Inquiry and Sophistication, otherwise known as the How, Why, and Where phases. For instance, the first phase is characterized by the question 'How can we eat?' the second by the question 'Why do we eat?' and the third by the question 'Where shall we have lunch?”

Guest's picture

11. Everything else.

Seriously, what's the point of itemizing "things that cost more at restaurants than they cost to buy or make at home" when in fact the whole POINT of restaurants is that you're paying more so you don't HAVE to buy it or make it at home? The restaurants earn money so they can pay their rent and their wages, and you get the food without all the work. Seems like a fair exchange to me.