Our waiters will be getting two raises soon. One will be a raise in the minimum wage, the other will be the increased tips they'll receive as a result of raised menu prices.
I'm not in this post going to belabor the point that California should have a lower minimum wage for tipped employees (it should), nor talk about switching to a service charge, or service compris system (it would be nice), or moan about a system that to a certain degree, perpetuates a slavery mentality, or demeans those that choose service as a profession (what would happen if the bulk of say, doctors' income came from tips for "performance"). No, the system sucks but I'm not going to be the one to change it.
I do however, need your help. In order to maintain the (slim) profit margin we have we will have to raise prices to cover increased payroll expenses. The increase needs to be at least 3.85%, so I've made a spreadsheet with a variety of percentages. We only do .25 increments on glasses or half glasses of wine and we rarely do .50 increments on food. Obviously, some items will increase by much more than the 3.85% and others may not increase at all.
I have read much about pricing, menu positioning and how those affect diners' decisions. But I'd like your input. Which items at your favorite restaurant would be the most price sensitive? What increases would you notice? What reads better to you $20 or $21 (yes smartass, I know one is a dollar less and hence more attractive, the question is are you going to balk at a $20 item that's priced at $21?)
Any other useful thoughts?