Unbundling the food and the seat

No, we’re not talking about airlines, we’re talking about restaurants. People in Europe are used to this already, but as an American visiting the UK recently, it was slightly surprising to see different prices for food and drink consumed on premise vs “carry-out”. For example, a muffin at a coffee shop might be £1.70 to go and £1.95 to eat at there. Over a $0.50 difference for a muffin. This is a useful price discrimination mechanism, although one that might not go over well in the US. As usual, instead of positioning it as a price hike, it would be useful to position it as a “to go discount”, like the “early bird special” at a restaurant.

Another restaurant actually had different menus, not just prices, with the to-go menu featuring bundles that could be put together rapidly for hurried commuters. This is another de facto form of price discrimination, which also discourages people who want to take out from ordering items which take a long time to make. This concept is broadly applicable to a lot of service industries, or “goods” industries with a service component.