I hope this can be discussed without getting political or contentious, but I am consistently baffled by just how affordable our meals are here - despite the fact that wait staff is generally paid more than in the US, there seems to be no pressure to turn tables multiple times in one night, and rents aren’t exactly a steal, at least in Berlin.
Someone in a Facebook food group I’m in suggested government subsidies, but I couldn’t find much along those lines, save for temporary financial support for the industry during Covid. However, this has been my experience long before the pandemic, and continues to be almost 2 years after.
I am aware that produce and foods are subsidized through the EU, which makes food in general cheaper, but… is that really all there’s to it?
(John Hartley - a culinary patriot eating & cooking in Northwest England)
I haven’t visited the States since 2018, so my experiences are somewhat out of date. And it’s so long since I visited Germany that I have no comment to make on prices there. But my recollection from that last trip (to New England) was just how expensive eating out was, in comparison with the UK . Now, we were not eating in the cheap chain restaurants where many Brits will experience “American” food on their trips to Florida. But, a like for like comparison with, say, a neighbourhood bistro type place was generally more expensive than the UK and, sometimes, considerably more expensive.
It’s the menu price of a dish, plus tax, plus a 20% tip that all add up. But what actually accounts for the overall cost comparison is unknown to me. Currency exchange rates certainly play a part. Yet, in the UK, we no longer benefit from EU subsidies and much of our food carries the cost of being imported.
I have only one trip over 10 years ago to Berlin to compare things to. I was there on business so maybe skewed but I didn’t think anything was really cheaper. My recollection is that prices were actually on the high side.
I am on a French island right now paying for everything in €. Prices converted to $ seem reasonable. So I think what you might be experiencing is the exchange rate. Right now the € had been weak but has strengthened a bit but if you look at this graph you can see it’s at the lower end of the historic range. At 1.6 $ to € you might feel differently. The graph is a bit weird as it shows the trading ranged prior to the € introduction which was in 1999. So other than the drop that happened immediately after euro convergence it had been much higher until recently.
I was working in London when the dollar was weak and it was nearly 2$ for 1£. All the numbers on the menus looked the same as they would be in NYC but the cost to me working for an American firm and getting paid in $ was basically double.
I remembered the Big Mac index. Measures relative cost of dining based on the ubiquitous burger. So according to this the US is a bit higher than the euro zone and much higher than what is happening in the UK right now. This changes as relative purchasing power fluctuates. The UK is going through a rough patch economically right now. US stronger than the eurozone. I think basic economics explains what the OP is experiencing.
Nope, the exchange rate plays no role in this as I have a Euro account.
Here’s an example menu from a very popular French bistro. The filet steak frites (about 7oz) that comes with beef tallow fries and salad is 29€, the ‘smaller’ entrecôte (closer to 6oz) rings in at 24€.
Of course, there is no expectation whatsoever to tip anywhere near 20 or even 10% of the bill, which makes up for a lower total.
If you don’t use exchanges rates then how do you compare different countries cost of dining? Otherwise the local price has no meaning to someone else. Comparable quality sushi is cheaper in Japan than the US but looking at nominal numbers priced in ¥ you would have no idea.
I think you have just found part of your answer. Go anywhere in the US to a nice restaurant and get a 6-7 oz steak and you will think where’s the rest of it? The smallest filet I can recall seeing is 8oz, a petit filet. Strip will often be 12 oz or more. 25-40% smaller portion means less food costs and has the added benefit for the patrons of not overeating. Americans are used to abundance not reasonableness. Frankly I would be happy with smaller portions. I often have leftovers I’m packing home after a meal.
Hope you’re up to date on on the FATCA compliance with that euro account.
Possibly the cost of liquor licenses? They are astronomical here in the Boston area; people opening new restaurants are often required to pay tens of thousands for a liquor license being re-sold. They have to recover that over years. Here is a link to an article documenting liquor licenses that cost $250,000, $230,000, etc. in Cambridge, just across the river from Boston. Of course, this may not apply in other major US cities.
Also, there is a lot of pressure at least in some US metropolitan areas for restaurants to cover some of the costs of health insurance for their employees. Europeans are able to get decent health insurance through their governments.
I understand that rents in Berlin are considered high. I wonder how they compare, however, to major US cities. Only high end chains are able to open restaurants in the very high rent district of the Boston Seaport, for example. Smaller, independent restaurants have opened in areas like Somerville (which shares a short border with a less expensive Boston neighborhood) where both the rents and the liquor licenses are cheaper than in Boston and in neighboring Cambridge.
It’s a complicated puzzle with lots of moving pieces…
The huge hunks that are sold in the US as single-size meat portions are outrageous. I don’t eat much meat for several years and I haven’t eaten steak for decades. Most Americans want large portions to feel like they are getting their money’s worth.
Look at the photo of a pork tenderloin sandwich served in Burlington, IA, that was posted on the American Food Wish List thread.
For wine prices, there is a huge monopoly in the US in that state liquor boards get to decide which wines can be imported to, sold in, ordered from residents of their state. It costs money to run these gatekeepers and the retail prices for imported wines are much higher in the US than they are in their countries of origin. California and other US winemakers seem like very different industries than European winemakers, but I could be wrong.
It’s my experience dining within both countries over the span of two decades, during which there has been plenty of fluctuation in the exchange rate.
The euro right now is actually stronger than the dollar, and we are still paying less money overall for meals out. On a side note, I find US steakhouse portions downright ridiculous, which is why I do not frequent them. 6-7 ounces of meat is plenty for one person in one meal.
As for your final sentence – I gather from your post history that we are not in the same financial universe, let alone ballpark, so I have absolutely no reason to worry about such things. I’m no Logan Roy .
Better health insurance in Germany vs. US? Cost of coverage is not the responsibility of employers, right? That certainly contributes to lower overhead, I’d think, even tho I read somewhere that only about 1/3 of restaurants even offer health insurance. It is for sure a big expense for other employers, including my biz (IT consulting).
1. Subsidies by the EU
The whole farming sector is heavily subsidized by the EU. This is done on intent, because it is believed to be essential to peace and stability that everybody has access to enough food. In fact food is so cheap, that the EU can sell frozen chicken parts to Africa and cut local producers on costs.
2. The unwillingness of Germans to spend much money on food
It has been getting better, but in general the Germans aren’t willing to spend that much on food. The usual saying is, that a German would spend more on the oil he puts in his car, than on the oil he puts in his body. So for the longest time, your best bet on being successful in the food business, was to be cheap. Quality came in second. Luckily, this has become better, but I guess the idea of paying more than 10 €/kg of chicken breast would still bewilder most Germans.
3. European food doesn’t have set sizes and color requirements.
Generally speaking, Europeans care far more about the freshness and quality, than how it looks. It doesn’t have to have a standard appearance, specific size, or single color. An apple is acceptable if it has spots, a tomato is fine if it has bumps, and it is fine if things come in different sizes. In the US, food producers throw away vast quantities of food that don’t meet a pre-set standard appearance.
4. Labor costs
In the EU there are less labor regulations (e.g. wage controls, OSHA, EDD, workers comp. etc) than there are in the U.S. and the employers (i.e. restaurant owners) are not responsible for the cost of healthcare. Everyone is (through taxes).
(John Hartley - a culinary patriot eating & cooking in Northwest England)
Generally speaking, that may be true. But our supermarkets care for little else than how it looks and how long it’s going to last on the shelf. Their policies of rejecting whole batches of produce costs the British farming industry a fortune.
I have worked in the Restaurant Industry for a long time, while this is not true for a Steak House, we have typically served about 6 oz of Protein as average Serving. Somethings would be less somethings a bit more.
What do you mean by this? Are you equating nominal numbers for economic parity? The euro is at the low end of its historical range since its introduction in 1999. The euro is weak though it’s has been strengthening recently. When the Deutsche Mark was converted into euros, the conversion rate was just under 2 DM per euro. Would your thoughts be different if the euro convergence had not taken place and all the prices you show in the menu were 2x in marks? You can’t equate nominal prices in different currencies. What would you think of prices in Turkish lira?
I grew up when having to work out Drachma, lira, and all kinds of currencies was a major part of one’s vacation. And I suck at math.
Yeah, when German menus suddenly changed from DM to Euro but prices stayed “the same”, i.e. cost double given the exchange rate 24 years ago, you bet that was a shock.
However, it has been 24 years, and I’ve continued to dine stateside (tho certainly not as much as we do here for any number of reasons) as well as in Berlin since. My original post stands. It is cheaper to eat at a comparable restaurant here than it is in the US