They say that information is power. But giving more information to customers about calories, it turns out, can also mean more revenue for food retailers, according to a new study.
A new study by Bryan Bollinger, Phillip Leslie, and Alan Sorensen at the National Bureau of Economic Research suggests that mandatory calorie posting in restaurants does not necessarily negatively impact restaurants' profits, and in some instances may actually lead to an increase in revenue.
The study, which examined consumer behavior at New York City Starbucks stores before and after mandatory calorie posting laws went into effect in 2008, found that adding calorie information to menu boards did not on average have a statistically significant effect on revenue.
And for the stores located close to a Dunkin' Donuts -- a Starbucks competitor in NYC -- daily revenue actually increased by an average of 3.3 percent after the calorie posting rules were instated. The authors suggest that since Dunkin' Donuts also posted calories, and because their food items tend to be very high in calories, consumers may have begun to substitute Starbucks for the doughnut chain.
The study found that posting calories led to a six-percent decline in the number of calories purchased per transaction. The effect was due in large part to customers purchasing fewer items per transaction. But consumers were also choosing lower-calorie menu items -- which were on average more expensive, and were likely to be have higher average profit margins. Interestingly, most of the calorie reduction at Starbucks was limited to food items, and beverage calories were largely unaffected.
Read the full study here.