24 HOUR SALE: ALL T-SHIRTS 20% OFF!
NeatoShop's last T-shirt sale of the year: get 20% off all T-shirts. Expedited X-mas shipping available - get yours now before the sale ends Dec 19, 2014.

Lobster is Cheap, Except in Restaurants

lobsterFishermen are hauling in a bumper crop of lobsters this year. The harvest started early and remains big. Wholesale prices are way down right now.

It’s clear that if you walk into a fish store that the price of live lobsters has indeed fallen sharply. But at the restaurants and seafood shacks that dot the coast, prices have fallen only modestly. Instead, the lobstermen’s pain is leading to windfall profits for restaurant owners, fueling dark talk of price fixing in some quarters.

***

The market-price scheme does work in reverse: When lobster prices rise, the market price does rise with them. If the price of lobster spikes, there’s no sense in a restaurant selling one at a loss even if you have empty tables. But the ratchet really only goes in one direction. When upward price swings squeeze margins enough, restaurants raise prices. But falling retail lobster prices generate big restaurant profits, angry lobstermen, and vaguely disappointed tourists.

Read more about how market forces shape the price of restaurant food at Slate. Link

(Image credit: Flickr user tup wanders)


Newest 2
Newest 2 Comments

Sounds like how gas prices work, too. Or coffee, or sugar, or just about any other commodity. Food prices up due to drought? Wait and see if they ever go back down.
Abusive comment hidden. (Show it anyway.)
Commenting is closed.





Email This Post to a Friend
"Lobster is Cheap, Except in Restaurants"

Separate multiple emails with a comma. Limit 5.

 

Success! Your email has been sent!

close window