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The economics of all-you-can-eat buffets

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Re: The economics of all-you-can-eat buffets

#171

Post by kbutler »

Scaevolus wrote: post #143
xenocyon wrote: post #132

The danger for consumers is assuming this is a zero-sum and that the converse economic goal applies to you (i.e. assuming that the consumer benefits by eating a lot or focusing on meat). I conjecture that after factoring in the economics of health and quality of life, the economic optimum for a typical buffet consumer is the same as for any other eater: to eat sparingly and in a balanced manner.

Buffets feel like an unbounded solution to optimizing for calories per dollar, which is a ridiculous thing to focus on as an overweight engineer!

Optimizing calories per dollar suggests hitting the cheap starch, which is even cheaper away from the buffet.

Optimizing expensive-food-per-dollar would hit the meats, rather than the highest-calorie options.

Re: The economics of all-you-can-eat buffets

#172

Post by mcguire »

milesskorpen wrote: post #86
brownbat wrote: post #70

Earlier quoted context omitted.

I can't figure out where that article gets its numbers from or which banks it's referring to. The industry standard measure for bank profitability is something called ROA, return on assets, and it's an extensively studied academic topic, with the general consensus that an ROA greater than 1% is pretty good. https://greyhouse.weissratings.com/ROA-ROE-and-What-These-Ke... https://www.fdic.gov/regulations/resources/cbi/…

Assets aren’t revenue though; I don’t think profit margin and ROA are comparable.

The aren't, which is why you're advised to stay away from financial institutions as a beginning small investor. They require specialized evaluation techniques.

Re: The economics of all-you-can-eat buffets

#173

Post by samstave »

AareyBaba wrote: post #146
Jommi wrote: post #56

I'm still at awe of the Sushi Buffet thing that you can see all around in Helsinki, Finland. So far I have not seen anything like it, anywhere else in the world. Usually the price you pay is 10€ for an unrestricted and no time limit access to eating sushi. And the sushi is incredibly okay! It's nothing compared to stuff you find Tokyo ofcourse, but the price for quality is literally unbeatable. And all this is happen…

I'll leave this here and step away 'cause I am supposed to be on a diet. Buffet in Mumbai https://youtu.be/kUosDBUjq5A?t=67

You might like this place in SF:

https://www.tajcamptonplace.com/dining/

Re: The economics of all-you-can-eat buffets

#174

Post by mcguire »

graeme wrote: post #34
chrisseaton wrote: post #28

Earlier quoted context omitted.

> there are business people who are apparently content running a business with such slim margins ... I'm left wondering why anyone would even bother A percentage margin is expressed relative to the value of the sales. Low margin on high value sales is as good as high margin on low value sales, in terms of how much money you make. Low margin is only a problem in low value sales. Why shouldn’t people running a business…

My expectation would be that if you’re used to operating in a high margin business you have ample room for error or fluctuation in conditions. In a low margin business, you don’t have such room for error, and you actually have to fluctuate with conditions. This isn’t a deal breaker: most business operate this way! But it’s scary for someone looking in from a high margin business.

You might think that, but errors and fluctuations tend to routinely cause high margin businesses such as software to collapse in large numbers. Think of the dotcom bust. I suspect part of the problem is these businesses flourish when the conditions are easy, but many don't have the experience or exceptional margins to survive long enough to adapt when conditions change.

Re: The economics of all-you-can-eat buffets

#175

Post by mcguire »

formercoder wrote: post #42
chrisseaton wrote: post #28

Earlier quoted context omitted.

> there are business people who are apparently content running a business with such slim margins ... I'm left wondering why anyone would even bother A percentage margin is expressed relative to the value of the sales. Low margin on high value sales is as good as high margin on low value sales, in terms of how much money you make. Low margin is only a problem in low value sales. Why shouldn’t people running a business…

It’s also important to look at capital expenditure intensity. Spending $100k to make .01% could make sense but spending $1B to make .01% is much tougher, from an NPV perspective.

You're describing all high-capitalization industries: heavy manufacturing, utilities, etc.

Re: The economics of all-you-can-eat buffets

#176

Post by samstave »

CPLX wrote: post #38
katzgrau wrote: post #16

The only thing I found more interesting than all-you-can-eat buffets actually turning a profit is that there are business people who are apparently content running a business with such slim margins. This article quotes a 5% margin. I know food industry margins are low in the first place, but as a business owner in a different field I'm left wondering why anyone would even bother. The same business prowess and attenti…

This may come as a shock but software is the exception. The vast majority of the business world operates this way. The fun part comes when you realize that absent monopoly conditions this is the natural stable state of a mature market, and think about what the future of software might look like, and what the current public policy fights are about.

This is the same reason that ILM/Lucas expanded to Asia...

A quote from Lucas at the time they were looking to build Singapore was "Why should I pay some prima donna animator in the US $80k when we can get several in Asia for that price with no complaints"

Yes, this was actually said by an exec at Lucas...

Re: The economics of all-you-can-eat buffets

#177

Post by retsibsi »

goatherders wrote: post #90
katzgrau wrote: post #16

The only thing I found more interesting than all-you-can-eat buffets actually turning a profit is that there are business people who are apparently content running a business with such slim margins. This article quotes a 5% margin. I know food industry margins are low in the first place, but as a business owner in a different field I'm left wondering why anyone would even bother. The same business prowess and attenti…

If I recall correctly Walmart operates with low single digit margins for most goods. They make up for it with favorable vendor terms; I read that a can of green beans sold by WM will turn over 6 times before they have to pay the vendor for the first can.

> I read that a can of green beans sold by WM will turn over 6 times before they have to pay the vendor for the first can.

I can't parse this but am curious what it means; can someone explain?

Re: The economics of all-you-can-eat buffets

#178

Post by grawprog »

Jommi wrote: post #56

I'm still at awe of the Sushi Buffet thing that you can see all around in Helsinki, Finland. So far I have not seen anything like it, anywhere else in the world. Usually the price you pay is 10€ for an unrestricted and no time limit access to eating sushi. And the sushi is incredibly okay! It's nothing compared to stuff you find Tokyo ofcourse, but the price for quality is literally unbeatable. And all this is happen…

There used to be an all you can eat sushi place here when I was a kid, it didn't last too long, only a few months, but they had all you can eat 'craft your own' sushi, you could choose they type and filling and they'd make it for you, they had a BBQ grill at each table you could get pieces of meat for, they had a noodle bar with a bunch of different noodles and broths, a rice bar with a bunch of different kinds of rice, meat and vegetables for the noodles and rice, and a grill you could get freshly fried up meats and vegetables, all you can eat for everything with no limits for $20 Canadian circa late 90's/early 2000's.

My dad took us there a few times, he still talks about it and how sad he was when it closed down. He figures it just wasn't economically feasible. You got ridiculous amounts of really good, fresh food for fairly cheap. Far cheaper than ordering individually. We usually ended up eating until we all felt sick.

Re: The economics of all-you-can-eat buffets

#180

Post by formercoder »

mcguire wrote: post #175
formercoder wrote: post #42

Earlier quoted context omitted.

It’s also important to look at capital expenditure intensity. Spending $100k to make .01% could make sense but spending $1B to make .01% is much tougher, from an NPV perspective.

You're describing all high-capitalization industries: heavy manufacturing, utilities, etc.

There’s still a big spectrum. Then we can look at “tech” companies like Lime which end up being extremely capital intensive.
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