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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.