ESSA

ESSA

Why the long queue?


Aleisha Hall

By

June 1st, 2016


If you’re a self-confessed “foodie,” you’re probably all too familiar with long queues to eat at your favourite trendy establishments. You’ve probably never stopped, however, to think about the economics of those annoying queues. Aleisha Hall explores the science of queuing.


As Melbourne becomes increasingly populated by so-called “foodies”, demand at many of our city’s most beloved restaurants, both new and old, has sky-rocketed. Social media platforms and food review websites, such as Instagram and Zomato, have become increasingly prevalent. Snapping a photo at the hottest new eatery in Melbourne and uploading it for all to see has developed into not just a hobby, but also a bragging right for many. In an age when our newsfeeds are constantly flooded with delectable dishes, it’s never been more tempting to go out for a fancy meal.

This growing desire to eat out, rather than cook at home, underpins the exponentially increasing demand at Melbourne’s finest restaurants and cafes. As simple economics dictates, when the demand curve shifts to the right, there should be higher prices to adjust to the increasing quantity demanded and ensure that no market shortages emerge.

However, many eateries do not abide by this basic economic concept. They leave their prices constant for various reasons, most prominently being the public outcry and poor reputation that may ensue. Thus, excess demand has persisted. Many of Melbourne’s trendiest establishments uphold no-booking policies, due to the costs associated with reservation technology and diners who do not show up. This only worsens the already long queues for Melbourne’s trendiest eateries. This has occurred at both renowned food institutions such as Top Paddock and Mamasita, as well as new, up and coming eateries, burgeoning with keen “foodies” eager to sample their offerings.

Ultimately, this then begs the question: why are people so willing to spend such exorbitant amounts of time waiting for food, despite the great deal of alternative ways to spend their limited time and money?

This can be answered by applying the marginal benefit/cost principle, an underlying assumption in the study of economics. For devoted food-lovers, the private marginal benefit they receive from a “foodie experience” exceeds the private marginal cost, even in the face of excessive waiting times and fundamentally high prices. According to strict economic theory, the competitive market equilibrium is only attained once private marginal benefit equals private marginal cost. Yet, as the prices at many Melbourne institutions fail to rise, the excess demand issue remains unresolved and long queues persist. Ultimately, it is those with the greatest willingness to pay that win out, as others cannot compete with their determination to gain a seat at Melbourne’s most highly regarded eateries.

At Lune Croissanterie’s old premises in Elwood, customers would arrive as early as 4.30am to secure what was recently dubbed “the world’s best croissant” by the New York Times. Many would come although there was a high probability that they would be one of the unlucky queuers who just missed out. The mere possibility of attaining them was a suffice incentive. Although Lune has recently moved to larger premises in Fitzroy, the excess demand issue has not been completely resolved. In spite of increased production, the typical queue still extends for at least an hour on any given day.

Incidences of extreme queuing, such as those at Lune, are inherent in the very structure of the food industry, a monopolistic competitive market. As products are differentiated, due to cuisine, price, reputation, location and ambience, consumers’ willingness to wait for a certain restaurant is derived from the fact that there is no perfect substitute for the coveted food experience they seek.

Chin Chin, Chris Lucas’ fusion Asian institution in Melbourne’s CBD, is another that commands a significant queue, spanning up to three hours long on their most popular nights. The aforementioned “foodies” are more than willing to queue if it means that they will get their hands (and cameras) on any of the famed dishes. Chin Chin has not increased their prices significantly over the past few years, preferring to rely on large turnover rather than high prices to ensure profits and survival.

The rationale behind this decision can be easily understood and justified using economic theory. As Benjamin Cooper, head chef, puts it, this business strategy, although not suitable for all demographics, “work[s] for younger people, who don’t mind waiting if they can save some money”. Given that the foodie population is mostly comprised of these “younger people,” the decision to keep prices low and quantity high is certainly a justifiable tactic.

In Melbourne, there are certainly countless other places where respectable croissants and Asian food can be indulged in. However, at the core of this trend is that it is natural for people to assume that a long line must be associated with an exemplary product. If so many are willing to wait for something, surely this must mean that the product is of exceptional quality. Long queues can be beneficial for business owners, because they signal quality and desirability.

Interestingly, it has been found that with the exception of famed restaurants like Chin Chin, generally, newer eateries have far longer queues. This is mostly due to the copious number of “foodies” who want to stake their claim and take credit for “discovering it first”. No matter how irrational and unsubstantiated such notions may be, it is in human nature to want to be the first and have a one up on others in regards to variety of experience. It is this mentality that could explain the unfathomably long lines at Melbourne’s most popular culinary destinations, with all desperate to snap the perfect photo and be noticed by the “foodie” community. Clearly, the mere thought of ample likes on an Instagram post is all too enticing for those consumed by this movement.

So next time you crave a croissant, you are going to have to arrive early.

The views expressed within this article are those of the author and do not represent the views of the ESSA Committee or the Society's sponsors. Use of any content from this article should clearly attribute the work to the author and not to ESSA or its sponsors.

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