This Canadian restaurant just lowered its prices. Here's how it did it
A Canadian restaurant lowered its prices this week, and though news of price tags dropping rather than climbing sounds unusual, the business strategy in this case is not, according to experts in the field.
Kinton Ramen, founded on Baldwin Street in Toronto in 2012, lowered the cost of its ramen bowl by approximately $2 on Monday, from $17 to $14.99.
The answer to the obvious follow-up question – how did a local business bring prices down while food costs remain high? – is simple: franchising.
- Download our app to get local alerts on your device
- Get the latest local updates right to your inbox
Kinton Ramen pivoted to a franchise model during the pandemic, expanding the local chain from 20 locations at the time to 38, with sights set on 45 by end of year.
The expansion, which now spans Ontario, Quebec, British Columbia, Illinois and New York, has enabled the restaurant to negotiate with suppliers, according to Kinka Family Senior Director of Franchise Development, Karalyn White.
“We've really been able to leverage our buying power to reduce the prices in the restaurant,” White said.
Supply chain pains were reflected on Kinton Ramen menus during the pandemic, with their original ramen bowls – pork, chicken, beef or fried bean curd with mushrooms, a seasoned egg and scallions – rising from $14.99 to $17 over time.
“We're back to where our prices were in 2021,” White said.
Grocery inflation has come down from its double-digit heights a year ago, but food prices in restaurants have kept rising, with Statistics Canada reporting a 5.1 per cent increase in March from a year earlier.
Customers at Kinton Ramen to start seeing lower prices on April 29, 2024 (Kinton Ramen). One of the biggest advantages of franchising is this ability to lower costs for valued customers, said Kersi Antia, a professor of marketing at Ivey Business School. “You get access to vendors who would normally not give you the time of day because you don't represent enough of a volume for them,” Antia said.
When a restaurant suddenly becomes a part of a pool of buyers, the volume of noodles, for example, significantly increases.
That also comes as an advantage to the supplier, explained Ryan Picklyk, Senior Director of Strategic Partnerships and Franchising at A&W Food Services of Canada Inc.
“It's easier for them as well. They gain efficiencies, which can result in getting lower pricing, ultimately for their customer,” he said.
When Picklyk joined A&W 15 years ago, the fast food business had 700 franchise locations in Canada. Now, it has nearly 1,100, Picklyk said.
While Kinton Ramen locations are still in the double digits, Picklyk, who also chairs the Canadian Franchise Association’s board of directors, said they share a foundation.
“It's a group of individuals coming together to achieve more success together than they could individually,” he said.
CTVNews.ca Top Stories
Community mourns victims of fatal boat crash near Kingston, Ont.
The three people killed in last weekend's tragic collision between a speedboat and a fishing boat north of Kingston are being remembered Friday.
Humboldt Broncos crash victims and families react to decision to deport truck driver
The family of one of the victims of the Humboldt Broncos bus crash in 2018 says they are 'thankful' for a decision by a Calgary immigration board to deport the driver of the truck involved.
More enoki mushrooms, Lamborghini Urus and promotionally-gifted tumbler cups: Here are the recalls for this week
Health Canada, Transport Canada and the Canadian Food Inspection Agency (CFIA) issued various recalls this week. Here's what you need to know.
'God forgives but we don’t': Loud outburst from stabbing victim’s family during sentencing hearing
An emotional outburst in a London, Ont. courtroom Friday disrupted the sentencing hearing of a woman who pleaded guilty for her part in the death of 29-year-old Mohammed Abdallah.
American Airlines drops law firm that said a 9-year-old girl should have seen camera on toilet seat
American Airlines has replaced the law firm that told a judge a nine-year-old girl was negligent in not noticing there was a camera phone taped to the seat in an airplane lavatory.
Luciano Benetton says he's stepping down as chairman of family-run brand as losses top US$100 million
Luciano Benetton, a co-founder of the apparel brand, announced he was stepping down as chairman in an interview published on Saturday with Milan daily Corriere della Sera. He blamed current management for losses of 100 million euros (US$108.5 million) that he discovered last year.
Three dead after vehicle leaves road in Shediac: N.B. RCMP
Three people have died after a vehicle veered off the road in Shediac N.B., Friday morning.
A woman took her dog to a shelter to be euthanized. A year later, the dog is up for adoption again
Exhausted and short on options after consulting two veterinary clinics, Kristie Pereira made the gut-wrenching decision last year to take her desperately ill puppy to a Maryland shelter to be euthanized.
1 dead, 3 in hospital after flying wheel crashes into bus windshield on QEW
A man is dead, and three others are in hospital after a flying wheel crashed into a coach bus on the QEW in St. Catharines.