Arlington wrote:Let's break this down for a moment - without any assumption of customers or labor. Let's look at the top line.AgentSkelly wrote:
And then it is still a serious question of whether, even if open those longer hours, the diner could ever charge high-enough "walk up" prices to pay for the additional food and labor. There's an unstated assumption that what's wrong with the diner are its fixed costs (and that food itself is profitable, if Amtrak could only sell more of it). We'd like to think so, wouldn't we?
If one choice choice is keeping both a Cafe and a Diner open and trying to generally sell more $ worth of food, surely another surer-bet is removing the diner entirely and trying to make the Cafe busier and higher-ticket. An upgraded, busier Cafe seems the surer bet because it starts with all the right elements of a "scalable" business model: lower labor costs (lower staff, less labor in each item), and standardized items.
Adding frills/fanciness/better stuff/higher-margins/more sales to the low-cost Cafe is probably a more doable plan than trying to strip down, speed up, or scale up the Diner. That's the lesson of the Innovator's Dilemma,
- the "weak" hydraulic digger "grows up" to destroy the steam shovel
- the tiny, bare bones japanese cars (think 1978 Civic or Corolla) grows up to be luxury cars (but GM & Germans can never quite "scale down")
- the simple McDonalds (hamburger or cheesburger) grows up to be a broad menu restuarant (but few restaurants ever successfully stripped down to compete with McDonalds)
Food Sales LESS Cost of Food Sales equals a positive gross profit.
If Amtrak is not achieving that, then they need to go back and re-negotiate with the vendors supplying their food costs. It is common sense that anything priced on the café or dining car menu should be priced to achieve a profit (again, not considering labor or what the mix of items sold is). If food and beverage items are not - on a 1:1 basis - then Amtrak has a serious problem to contend with. What evidence is out there on a granular level that food prices listed on café and dining car menus are not greater than what their cost is? The layperson doesn't have that at their disposal and I am not sure if those working food cars even know.
What is known is that labor costs are largely a fixed cost for ANY train. Even a Cascade train is operating on a particular timetable schedule. The unknown is whether a passenger will come to the lounge/café for a last minute meal or drink before departing. So any inventory automation module should be welcomed and if it extends hours operation of selling food/beverages - so be it.
By the way the Cascade café car operates with a totally different menu than what you'd find on Midwest, Western, and Eastern café cars. Frankly - it's better food and worth it. The Cascade café in my mind is more of an upgraded operation in terms of its selection. The food served here should be a model for other café cars. The only other café car that I've been impressed with quality and type of food is the Downeaster service.
I agree that one way to go is upgraded, busier Café cars - for all Amtrak trains. The trains to Lynchburg, VA that operate on the NEC - seem to always be busy!
But one now needs to apply that same concept to the Diner operating on the long distance trains. Right now, the Diners are stripped to their bare minimum in my opinion. What can be added back (e.g. a "special") that would yield a greater gross profit margin? I remember one time they had crabcakes as a special on the Capitol Limited. They were VERY popular.
And yes, Amtrak is going to get the sleeper car passengers for most meal seatings. The accounting just needs to be done to ensure a proper division of the house so that the "sleeper" is allocated its proper revenue portion, and the Diner gets allocated the cost of a full breakfast, lunch and dinner. Again, the way Amtrak has been going at this lately is - "let's not offer the salad unless it is requested," "let's not offer descent desserts so as to get more money out of the sleeper allocation," "let's limit the number of drinks offered," "let's downsize the breakfast and/or lunch option." In this manner all that is being done is charging the same in $$$ for a sleeper and receiving less in the diner. Amtrak hasn't addressed the fact that they are still faced with fixed costs of the onboard dining car crew........What coach passenger is going to come to the diner for some of these downsized breakfasts'? A captive audience - Amtrak has to make it a goal to attract passenger to the diner if they want to reduce the dining car loss or have less of a loss. My opinion is that the diner will NEVER operate at a profit or break-even.
