Retail Beef Cuts - Establishing Cost And Selling Prices
( Originally Published Early 1900's )
RETAIL BEEF CUTS
Greater New York Style of Cutting
Test Sheets Nos. 21 to 40
In order to get authentic cutting tests, the figures used in these charts have been taken from a test made by Ye Olde New York Branch United Master Butchers of America.
It will be noted that the New York style of cutting calls for many more different cuts than are in demand throughout the middle west. A more detailed description of the different styles of cuts demanded is given in the chapter on "Meat Cutting Methods."
The New England district and the eastern part of the United States such as Boston, New York and Philadelphia, consume higher grade beef, on the average, than is used throughout the middle-west. The better grades of beef carry, of course, a larger percentage of fat and waste, and this is reflected in the figures because the actual cost price per pound is considerably higher. As an example, with 30% added to the wholesale cost 12 cents per lb. of beef, the retailer has an ACTUAL cost price of 17.07 cents per lb. This is more prominently brought out by comparing it to the Chicago and other styles of cutting.
New York, prime cost 12 cents
Chicago, prime cost 12 cents
Baltimore, prime cost 12 cents
Northwestern, prime cost 12 cents
This is even more clearly demonstrated when the average selling price per pound of beef shown in the three cutting tests is compared to the New York style of cutting and the grade of meat handled. For example, by adding 30% to the ACTUAL cost price, the average selling price per pound of beef is:
New York 22.21 cents
Chicago 20.52 cents
Baltimore 20.74 cents
Northwestern 19.97 cents
The cost and selling prices on the New York style of cutting have been established on a cost basis of 12, 13, 14, 16 and 18 cents per lb., wholesale, while the operating expenses have been figured on the same basis as in all other tests, namely, 20, 21, and 22%, plus an additional 5% for profit.
A study of these tests presents some very interesting facts. For instance, if 23% gross profit is desired, the side of beef which cost the New York retailer $44.00 must bring him a total return of $66.00, or in other words, a total of 50% must be added to the PRIME cost, or 30% added to the actual cost. In other words, there is really a difference of 42% between the original or PRIME and the ACTUAL cost.
As in any other locality, the retail selling prices in the New York style of cutting vary considerably. In trying to establish correct selling prices, the retailer must bear in mind the final results to be obtained, namely, the total figures represented by ACTUAL cost, the overhead expense plus net profit desired. This is a fundamental fact which no retailer must ignore in making up or studying these charts.