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
Driver, 18, gets $3,000 ticket, 32 demerit points after speeding on Laval boulevard
A young driver received a hefty fine from Laval police after they say he was driving nearly 100 km/h over the posted speed limit.
Trump confronts repeated boos during raucous Libertarian convention speech
Donald Trump was booed repeatedly while addressing Saturday night’s Libertarian Party National Convention.
This type of screen time has the worst effect on kids: experts
According to some experts, there is one type of screen time that is continuously excessive, and it's having a severe effect on our children.
Custom baseball card released of Blue Jays fan struck in the face with foul ball
Liz McGuire, the Blue Jays fan who was struck in the face with a 110 m.p.h. foul ball last week, has been pictured on a custom baseball trading card applauding her fandom to the game.
As Canada warms, infectious disease risks spread north
Cases of Lyme disease have now increased more than 1,000 per cent in a decade as the warming climate pushes the boundaries of a range of pathogens and risk factors northward.
Blaine Higgs 'furious' over sexual education presentation
New Brunswick Premier Blaine Higgs has shared his anger on social media over a presentation in at least four high schools.
Grayson Murray, two-time PGA Tour winner, dead at 30
Two-time PGA Tour winner Grayson Murray died Saturday morning at age 30, one day after he withdrew from the Charles Schwab Cup Challenge at Colonial.
Why did the French Open cancel a farewell ceremony for Rafael Nadal? And why is he unseeded?
The French tennis federation put off holding a ceremony to celebrate Rafael Nadal at Roland Garros this year, because he has said this might not necessarily be his final appearance at the tournament he has won a record 14 times.
Search underway for missing swimmer on Lake St. Clair
A search is currently underway for a Michigan man who police said jumped into the waters of Lake St. Clair on Saturday afternoon and did not resurface.