Sunday, July 14, 1996
Revenue from food price hikes will fund facilities renovationsBy
Michael Angell
Summer Bruin Contributor
Start digging through your pockets, behind couch cushions, and
into that jar of pennies on the desk. Why? Because ASUCLA Food
Services has just raised its food prices.
Not by much, though. Customers should expect to pay anywhere
from a penny to 40 cents more for their favorite menu items.
"Our costs increased so we have to pass on those costs to the
consumer," said Kert Evans, director of ASUCLA Food Services.
Menu boards with the new prices went up on June 24th. Evans said
that summer is the best time for such increases because there are
fewer people on campus.
"Price reaction is less during the summer simply because there
are less people on campus. Summer was a logical break during which
we could make the changes that we had to do. It was our best window
of opportunity."
Prior to the summer break, Evans and three of his staff members
reviewed prices on each of the 900 menu items offered by campus
eateries for their costs and popularity.
The result was a 3.5 percent average raise in price.
The increases are a result of higher operating expenses. Evans
said that it is inevitable, as operating expenses go up, that food
prices will have to increase.
A portion of the revenues generated by the price increases will
pay for "facilities rehabilitation."
One expense will be refurbishing many of ASUCLA’s dining rooms.
Kerckhoff Coffee House is currently being renovated, with the
Treehouse and Jimmy’s Coffeehouse to follow in the near future. A
new coffee shop called Northern Lights will be opening on North
Campus in August.
The improvements reflect the association’s renewed investment in
its infrastructure, Evans said.
"For a long time, ASUCLA did not reinvest in its
infrastructure.," he added. "Prices were low but the facilities
were in a state of disrepair. A portion of these price increases
will go towards infrastructure costs, which means a better
facility, a better product," Evans said.
The increases are expected to generate approximately $350,000 in
additional revenue for ASUCLA. Evans emphasized that increases are
not a way for the association to deliver itself from its financial
crisis.
"We’re not using price increases as a way to increase profits,"
Evans said. "The price increases are a defensive strategy in order
to pay our own business expenses."
In making the decision to raise prices, Evans considered which
items could generate increased revenues for the association. In one
instance, he decided against raising prices on one item because it
was so popular.
"We did not raise prices on soda, which is our largest selling
item," he said. "We could have raised it a nickel and made a
million dollars but we did not want to antagonize anybody. It
doesn’t do us any good to anger any customers.
"Our prices have been artificially low for a long time and we
need to make small adjustments in order to meet our costs," Evans
continued. "Some items have moved closer to market value. In most
cases, the prices are similar," he said.
The slight increases have not caught many people’s attention.
Evans and his staff say that they have not received many complaints
regarding the increases.
"One guy came into Kerckhoff and commented on the price
increases, but he came in with exact change for a cup of coffee,"
said Dave Newlove, manager of Kerckhoff Coffeehouse.
And how did Newlove handle the complaint? "I let him have it for
the old price."
"Anytime prices increase at any business, people notice," Evans
said. "If you bought a car for $5000 and the next day saw the price
increase to $6000, you’re going to notice that.
"Food is one of the things that people buy everyday, so that
when a price increase occurs people notice immediately," he
added.
Despite the increases, food prices are still generally lower at
campus eateries than they are at off campus eateries. For example,
a 16-ounce Cappuccino Blast costs $2.75 at Baskin-Robbins in
Westwood, but only $2.65 at Kerckhoff. A regular scoop of ice cream
costs $1.70 in Westwood, but only $1.45 at Kerckhoff.
But low food prices are not the only thing that the association
offers. ASUCLA Food Services employs 650 students at wages higher
than they would receive if they worked at similar jobs off-campus.
ASUCLA Food Service dining rooms also serve as study and social
space for UCLA students, Evans said.
"Baskin-Robbins does not provide study space. Somebody’s got to
pay for that light bulb, somebody to hose down the walk way," Evans
said.
ASUCLA food prices are even lower than some of its on-campus
competitors. The chicken rice bowl at North Campus and the
Bombshelter costs $2.49,while a comparable Panda Express rice bowl
costs $3.29.
In their price revaluation, some prices even dropped. Lovers of
stew and deluxe cookies will find prices on their favorites have
dropped. And caffeine junkies should be relieved that the price of
espresso has dropped.
"We felt that we weren’t competitive on espresso, so we lowered
our prices," Evans said. "Any business will have to stand up to
competition and that’s what we’re doing."
While price increases of any kind are generally not popular,
third-year business economics student Jamee Gu agrees with Evans’
assessment of the situation.
"I mean, it’s simple economics," she said. "The invisible hand
governs the market place and if prices are going up on the one hand
they will inevitably go up on the other end of the scale."
PATRICK LAM/Daily Bruin
The revenue produced by increased food prices will assist in the
remodeling of Kerckhoff Coffeehouse, the Treehouse and Jimmy’s
Coffeehouse. The money will also help fund Northern Lights, a new
coffee shop coming to North Campus.