Is the Senior Slam Smart?

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Denny’s breakfast menu in Provo, Utah, offers something that combines demand-based and cost-based price discrimination, but it’s neither.

The “French toast slam” is two pieces of toast and two eggs, two strips of bacon and two sausages for $6.99. The “senior French toast slam” is one piece of toast and one egg, and two strips of bacon or two sausages for $5.49, and you must be at least 55 years old to buy this.

You pay 20 percent less and get half as much; but why restrict it to older people? Denny’s cost saving on the senior slam is probably less than 20 percent. Perhaps the demand elasticity of the 55-plus is higher than that of the younger set, so that explains the price difference as demand-based. Some seniors would prefer the smaller meal and happily pay as much or even more for it, rather than purchase the regular Slam where they would feel compelled to eat everything.

Does Denny’s understand behavioral economics? Why do they charge seniors less? Why this unusual pricing scheme?

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  1. Mark says:

    Seniors could do what my parents do: buy a grand slam for $6.99 and two cups of coffee, plus an extra plate.

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  2. MichaelM says:

    My guess is that its seniors only because college students are cheap and would probably go for it. (BYU and UVU are both in Provo)

    If I were a lighter eater (eg. many seniors), and weren’t the type to bring home leftover french toast (eg. most people?), then the best value for me would be the cheapest meal that I liked that gave me more food than I could eat.

    Even if it’s only 20% off for 50% of the food, all the leftover food is useless to me in this situation anyways.

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  3. Lorraine says:

    2 people eating together could split the bigger meal and eat for 3 bucks each – and they could be any age

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  4. mike mccreads says:

    Something similar was also on the McDonald’s menu. There was a 20 piece chicken nugget meal for $6.59, and there was a dollar menu meal 4 chicken nuggets for a dollar. Being finance majors in college we took advantage of the price discrepancy and ordered 5 one dollar meals. A year or two later the pricing scheme has since changed.

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  5. Brad Hicks says:

    It’s been true for quite some time that the price of the raw ingredients has been the lowest cost for most restaurants, dwarfed by mortgage, utilities, taxes, and above all payroll. It takes the chef pretty nearly the same amount of time to cook two eggs that it takes him to cook one. In terms of the restaurant’s actual cost structure, they’re probably making a whole heck of a lot less profit, if any, on the Senior Slam than they are on the regular Breakfast Slam.

    (This, not customer greed per se, is why restaurant portion sizes have skyrocketed over the last 40 years. Non-food costs to the restaurants have gone up so fast they have to charge what they’re charging, even if all you “ate” was a glass of water, just to afford to have you sitting at that table; they piled nearly-free food on the table until you were willing to pay the price of the table.)

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  6. Anjan says:

    It may signaling. They would not necessarily think it through and feel that they are getting a deal, then they would order a meal that they would not have.

    The contrast btw the options creates a sale, either option on its own would not be as effective.

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  7. Anne says:

    Isn’t the goal of Denny’s senior specials to get seniors through the door in the first place? It seems like if you extended the special to too many groups, then you wouldn’t lure any of them because none would feel like they were getting a special deal. It is weird to me that Denny’s often (always?) has free wifi, it’s great, but is a little inconsistent in terms of target market

    It seems like when there are multiple sizes of things- e.g. drinks and popcorn at the movies, Starbucks drinks, there is never a constant proportional relationship between the amount paid and received, although it is usually the opposite of this when the larger size gives you more grams of food per dollar.

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  8. geoffrey says:

    The food cost is a small portion of the total cost..

    There is not much difference in labor of the cooks or waitress between the two meals.

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