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
Woman with liver failure rejected for a transplant after medical review highlights alcohol use
For nearly three months, Amanda Huska has been in an Ontario hospital, part of it on life support, because of severe liver failure. Her history of alcohol use is getting in the way of her only potential treatment: a liver transplant.
Banking mogul suing government after intelligence leaks leave him shut out of Canadian economy
Chinese Canadian banking mogul Shenglin Xian has launched a $300 million lawsuit against the federal government. It’s a means to find the source of intelligence leaks which Xian says has cost him his livelihood.
Jesus is their savior, Trump is their candidate. Ex-president's backers say he shares faith, values
As Donald Trump increasingly infuses his campaign with Christian trappings while coasting to a third Republican presidential nomination, his support is as strong as ever among evangelicals and other conservative Christians.
Box tree moths have infested Ontario and experts say more are coming. Here's what to do to protect your garden
An invasive moth species is on the rise in Canada and, if you've planted a certain shrub, it could stand to ruin your garden.
Truck engulfed in flames with owner on scene in Scarborough
A truck was engulfed in flames in the early hours in Scarborough on Saturday.
To plant or not to plant? Gardening tips for May long weekend
May long weekend is finally here, and with the extra time off you may be getting the itch to head out to your garden and plant. However, the old debate whether you should plant now, or wait, is still ever-present.
Hundreds walk backwards in downtown Montreal to symbolize the decline of LGBTQ2S+ rights
On Friday, hundreds gathered and walked backwards in the heart of Montreal to honour the International Day Against Homophobia, Transphobia and Biphobia.
B.C. man 'attacked suddenly' by adult grizzly near Alberta boundary: RCMP
A B.C. man is recovering from multiple injuries after he was "attacked suddenly" by an adult grizzly bear near Elkford Thursday afternoon.
His SUV was stolen on Montreal's South Shore. Then he got a $156 parking ticket
A couple is frustrated after their SUV was stolen from Montreal's South Shore in March and they received a parking ticket for the same vehicle last week.