How do profit margins at cheap all you can eat buffets work?

Ever heard of loss leaders?

Waitresses get like $2 an hour.

A family friend owned an AYCE franchise for about 20 years.

According to him, at least with informal conversations, their ability to make money was based on a few different tricks to AYCE buffets.

One, they didn’t hire nearly as many people as a regular restaurant. They had fewer waitresses and servers. Two hosts and one or two people to check on the large eating areas. They also served a lot of precooked items and the cooking staff was minimal. Overhead was small. Plates and cutlery were as cheap as possible as well as customers weren’t there for fine dining.

Two, the buffet design was set up to place cheaper, more filling items in the front and items with less profit margin in the back. Even then, items like steak or chicken were cut thin. He explained that most people don’t really know the difference between a 6oz steak and a 3oz steak when it’s mashed against 11 other scoops of food.

Three, while many people do load up on food like obscenely obese monsters, more people actually ate less than they would at other restaurants. As he put it once, everyone in a Mexican restaurant is getting a large amount of food (chips + dips + entree) without actually wanting it. At his buffet, people who weren’t there to gorge would make smaller plates and not overeat thus making up for some of the multi-plate customers.

Four, his restaurant (Golden Corral) sold entrees that were more expensive than the AYCE buffet but were mostly the same food. A steak and sides entree would be a slightly larger cut of the same steak as the buffet but the sides were the same.