Last week, I stood at the ‘hatch’ at Pinstone Street waiting for my lunch alongside the other customers who had braved the cold wind for their burrito. As I was not wearing my red cap and yellow t-shirt (yes I do sometimes do that) – I could not be distinguished from any other customer – I watched a woman point out the £5 price tag for the Christmas Burrito, and mutter ‘disgusting’ to her companion.
Now, she could have thought that the idea of a burrito filled with turkey, prune and cranberry salsa, stuffing, potatoes, bacon, black beans, iceberg and sour cream is disgusting. Or, she could have been referring to the price.
Whichever, I wondered if it would be interesting/relevant to write about the £5 price tag. There has been a lot in the news this week about a couple of entrepreneurs who have set up a Cereal bar (Cereal Killers) in Tower Hamlets in London. You can only buy cereal and it costs £2.50 and upwards. Much has made of this, the Guardian reporter Symeon Brown questioned whether this price tag was appropriate for such a deprived area of London and Gary Keery (one half of the twin entrepreneurs) sent an open letter to Channel 4 via his twitter account stating:
“I still have to pay over-the-top rent for my premises and pay the 12 staff I have employed, so I either have to make a profit or I will be out of business.”
“Maybe if I charged more than £3 for a coffee and dodged all the taxes in the country like some cafes – the reporters would leave me alone would they?”
All business owners think long and hard when pricing up their products. We know that we must make a profit to stay in business – the strong likelihood being that all of that profit will be put back into the business to continue to improve it anyway. We know also that we must take affordability, value for money and competitors prices into account.
When we set up The Street Food Chef, I felt defensive when a customer questioned the price of a portion of a guacamole or a large burrito. Over the past couple of years, I have come to feel more comfortable with the great value that our burritos offer. We make everything from fresh ingredients – and this doesn’t mean I need to consider only the cost of those ingredients, but also the cost of the great team that do all this cooking, rolling and serving.
I thought it might be useful to identify how much of the Christmas Burrito’s £5 price tag went to stock, staff, fixed costs, VAT etc. However, in writing this, I think I understand our mistake must be in the perceived value of our product. How can Starbucks get away with charging what it does for a coffee, and our £5 Christmas Burrito could be considered disgusting?
Do my customers know that about 76p of every pound spent in my business will go back into Sheffield, via wages, suppliers and rent and rate payments? Do my customers know that I employ 23 staff and everybody is involved in food production rather than buying ready made salsa etc? Do my customers know that our burritos taste so good, because everything is made using fresh ingredients?
So, my work must be to communicate this value, to let our customers know that our burritos are made with love as well as great ingredients (yes, they really are). To communicate that we really value our customers and the ongoing support they give us, and that we fully understand that for you to come back and enjoy another burrito with us, you may not need to know exactly how each penny is spent, but that you trust us that something that tastes this good needs to cost what it does.
I have been reading Andy and Jill Hanselman’s new book Think in 3D, specifically the chapter about creating an uber-culture in my business. They begin by saying that 3D businesses (Demonstrably and Dramatically Different) set values which they ensure run right through the business. One of our core values is to do business with honesty and integrity , and although we are a way off having an uber-culture at The Street Food Chef, perhaps the question is how do we ensure that our wonderful customers (loyal ones and potential ones) experience the values that we work by?
Let me know what you think, we are really keen to hear from our customers. Meanwhile, I have just eaten a Christmas Burrito, and it was spectacularly delicious! Well done to the chefs!