Pi Attitude Zone: Material Status
Down With Lobster
Lobster is at the top if the list of what most people consider a luxury dish. Interestingly, it wasn’t always like that.
In New England in Colonial days, lobsters were so plentiful they were considered low-class food to be fed to the domestics. Some brave servants even forced their masters to sign a pledge not to feed them lobster above three times a week. Then in the 1800s overfishing began to deplete supplies, and lobster got itself re-classified as posh food for rich folk. It still carries that cachet today.
But, just as stock prices can go down as well as up, supplies of luxury foods can go up as well as down. It may be something to do with global warming, but recent years have seen significant increases in the lobster harvest. Wholesale prices can tumble. A decade ago Maine lobster was wholesaling at six dollars a pound. The price fell by half in four years, and plummeted thereafter. In mid-2013 lobster was selling off the boat at $2.20 per pound (lean ground beef was retailing in America at $4.80 per pound at the time), though the lobster price has since rebounded.
At times there has been more lobster out there than anyone knew what to do with, yet menu prices for lobster tail always stayed high. If the laws of supply and demand were the only factor, lobster would have become a cheap food in restaurants again when there was an over-supply. It didn’t, and that fact offers lessons to students of both marketing theory and human attitudes.
The reason is partly that certain goods get exempted from the status of commodities, and can still command prices set more by human psychology than market realities.
High-end restaurants worry that discounting their lobster-based dishes would have sent “the wrong signal”, you see, undermining people’s perception of lobster as a luxury. As Pi has noted before, price denotes quality in consumers’ minds, and lower price implies lower quality. So restaurateurs try to insulate their swankiest offering from the workings of the market. Keeping prices high for Lobster Thermidor and similar entrées may mean fewer sales, but overall it still enhances profits.
Perhaps the most powerful reason that menu prices for lobster stay high is humanity’s habit of comparing prices up and down the menu. If the price for a lobster salad were the same as the poached salmon or the sea-bass, those other dishes would suddenly seem “overpriced” by comparison. Some eateries have been known to boost volume sales by slyly adding lobster in lower-priced formats (lobster bisque soup, lobster BLT sandwiches etc.) without spoiling the crustacean’s exclusive image.
It’s a case of “ignore the supply, push the demand”. Sometimes market laws, it seems, are made for breaking.Zone: Material Status Country: USA / North America Product – Consumer Products