Is Selling Water Your Business? #

One of the most annoying practices in bars and restaurants is paying a premium for still water. It is a too common practice that makes no sense even if you are trying to find a formula for maximizing the value of the menu.

Water is ordered because one is thirsty not because it is will replace another beverage choice from the menu that has a higher markup and will generate more profit. So it plays a complementary role because is “this drink and water” and never “just water”. In the rare case someone is that cheap to not have a drink and orders only water will most surely also order the most cheap items from the menu which means it is far from being the ideal customer anyway.

This is one those practices that the customers just have to tolerate because this is how business is done and have to suck it up but it actually hurts the whole experience. It takes so much more effort to make the whole experience so much better so that your customers move past the high price paid for the still water. To make things worse, it is very hard to find a reason to excuse the high markup.

Another similar practice is pricing smartphones based on their storage capacity or paying extra for an extra 10cm leg space in low cost airlines plane tickets, but at least you can come up with a somewhat convincing excuse for which this could be somehow reasonable. You have to try very, very hard to come up it with a half assed excuse about why it might be reasonable to pay that much for still water.

The worst part is that even with a high markup on the still water, that is not the what will move the needle between a restaurant being profitable or not because is not the markup on the still water that made the difference in hundreds of dollars dinner bill.