How much is too much when it comes to eating out?

You often hear from restaurant people that a business or accounting degree doesn’t really prepare you for running a successful dining operation. OK — so what about that psych degree your crusty uncle ripped as a waste of time and money?

In the world of sales, there is a concept called emotional pricing. For restaurants, this translates to how much operators can charge for their dishes — especially as they see their own food and labor costs skyrocket — without turning off their cost-conscious customers.

A 2025 James Beard Foundation industry report found that 91% of restaurants raised their prices between 2% and 10% last year — without seeing a profits dip. But those that raised their prices above 15% did see reduced profitability. So there does seem to be a sweet spot.

But how do restaurants convince customers to accept even a 10% higher price, especially during these tough financial times? That’s where emotional pricing comes in. Like a film director, it’s the restaurant operator’s job to get their audience to buy into their narrative — that the meal they’re getting is worth the amount they’re being charged.

We spoke with a local restaurateur, a food influencer and a national restaurant analyst to get a sense of how restaurants do that.

Caitlin Cutler, co-owner of Ronan.

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Courtesy Ronan

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Communicate uniqueness

Caitlin Cutler and her husband, Daniel, run Ronan on Melrose, specializing in modern sourdough pizza.

She says for restaurants like theirs, this challenge is particularly vexing.

“People expect it to be cheap. But yeah — we don't serve cheap pizza,” she said.

Their best seller, the margarita pizza, costs $23.50. But they have their reasons. They use 100% sourdough, which is fermented for two days. That requires a skilled craftsman, which is obviously more expensive. In addition, the fermentation window requires extra storage space on premises, which equates to higher rent.

The Super Marionario, one of Ronan's carefully crafted pizzas

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Ezra Salkin/LAist

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Yet they’re competing with products from “the other side of the spectrum,” Cutler said.

“[It's very difficult] to communicate to guests that our product is different than another product which might look similar but is actually very dissimilar," she said. "You're not going to a pizzeria, you're going to a restaurant that serves pizza.”

Cutler said they have front-of-house staff explain to customers the uniqueness of what they’re eating. But the time and place to do that is up for debate.

“When they're here and they're hungry, they don't necessarily want to talk about fermentation,” she said. So, a delicate hand is necessary.

Cutler said rather than having high prices on the menu, many restaurants go the small plates route, which are cheaper, to give the impression that they’re offering a bargain. But that can actually be deceiving, since in reality, those small plates add up quickly.

“Sometimes you have to order 10 things to get full. [In contrast], pizza will fill you up pretty quickly,” she said. “Often, customers look at Ronan’s menu and go, ‘Oh, that’s expensive’. But when they get their bill they may be surprised, because maybe you don’t order as many things.”

She said that’s the feedback she’s got from their investors.

“They'll come eat and they'll get their check and they're like, ‘This was so cheap, you guys have to raise your prices!’ And I'm like, 'I absolutely cannot raise my prices!'"

Show and tell

Luca Servodio, host of the L.A. Food Podcast and the L.A. Countdown, has eaten at more than 1,000 L.A. restaurants, so he has a sense of food economics.

But as a proud Italian, when it comes to something like pasta, “considered an extremely inexpensive food,” he said he needs a little “psychological prodding” to pay upwards of $30 for pasta at a high-end establishment.

“My inner fat kid kind of balks at the portion size,” he said.

Luca Servodio.

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Luca Servodio/LAist

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Servodio said he witnessed one savvy way for restaurants to mitigate any potential opprobrium come bill time at acclaimed Funke in Beverly Hills. Their in-house pasta laboratory gives customers a detailed and sensory look into the pasta-making process.

“And that trick, if we’ll call it a trick, I think that made my mind feel a little bit better, because you're literally seeing it. [Usually] when you break down the cost of something, you're not thinking about the actual people [and the technical labor] behind it,” he said.

Anne McBride, VP of Impact for the James Beard Foundation, who oversaw the previously mentioned report, agrees that adding experiential factors to the meal can help get customers to open their wallets.

“When it is more expensive than it used to be to dine out, people are definitely looking at all of this a lot more carefully and [at] every aspect of the experience," she said.

The report lists several suggestions to add value to the customer experience, like creating moments of "surprise and delight" through tableside services, unique plating, and interactive elements that enhance the dining experience — like the pasta lab.

McBride also recommends finding ways to showcase the staff in the restaurant and through social media, “creating this feeling that it's not just the chef, but it's really everyone who's welcoming you in a restaurant makes a difference."

Cutler echoes this. “When you walk out the door at Ronan, every single person says thank you to you,” she said. “There are other restaurants where you walk out the door and no one even acknowledges you.”

Another effective way to connect with the customer, McBride said, is a restaurant supporting a nonprofit or social good campaign. It's for customers, especially for the more socially conscious Gen Z ones, to feel like their values are aligned with the business.

“It adds a feel good aspect,” she said.

So even if a customer is not directly supporting a particular organization or cause, she added, by dining out you can feel like you’re contributing — "so that extends your philanthropic effort as an individual in a way.”