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
NEW Pack the macaroni necklace: Lessons on evacuations from a woman who fled one of Canada's worst wildfires
Carol Christian had 15 minutes to evacuate her home during the Fort McMurray wildfires in 2016. She ended up losing the house and everything inside. Now, she wants to share the lessons she learned.
Scheffler detained by police at PGA Championship for not following orders after traffic fatality
Masters champion Scottie Scheffler was detained by police Friday morning on his way to the PGA Championship, with stunning images showing him handcuffed as he was led to a police car. ESPN reported he failed to follow police orders during a pedestrian fatality investigation.
Ontario sees first measles death in more than a decade after young child dies
A young child has died of measles in Ontario, marking the first death in the province from the highly contagious virus in more than 10 years, a Public Health Ontario report confirms.
Think twice before sharing 'heartbreaking' social media posts, RCMP warn
Mounties in B.C. are urging people to think twice before sharing "heartbreaking posts" on social media.
'Ugly produce': One way Canadians are shrinking rising grocery bills
As the cost of food in Canada has risen, grocery shoppers are looking at ways to reduce their grocery bill, and more are choosing price over beauty, turning to companies that deliver so-called 'misfit' produce at a fraction of the cost.
Vatican revamps norms to evaluate visions of Mary as it adapts to Internet age and combats hoaxers
The Vatican on Friday radically reformed its process for evaluating alleged visions of the Virgin Mary, weeping statues and other seemingly supernatural phenomena, insisting on having the final say in whether the events are worthy of popular devotion.
Wildfires are dampening against cool, rainy weather, but there's plenty left to contain
An opportune system of cool, wet weather Friday is dampening the spread of wildfires across Western Canada, but there's still plenty of work for responders and residents alike.
Jessica Biel hopes to normalize the conversation around menstruation with a new children's book
Jessica Biel is the author of a new children’s book focused on destigmatizing and normalizing the conversation around menstruation.
5 secrets to moving better and preventing avoidable injury
Countless people seek emergency care for back pain, muscle strains and similar injuries resulting from 'moving wrong' during mundane, everyday tasks such as bending over to tie shoes, lifting objects or doing household chores.