Joe's Crab Shack Is the First Big Chain to Ban Tipping
Joe's Crab Shack, purveyor of fine sea food meals at reasonable prices, just became the first major American chain restaurant to eliminate tipping -- thus finally freeing the world from those cheesy "just the tip," jokes that gel so well with "Crab Shack."
Following the lead of culinary iconoclasts like Danny Meyer, Joe's servers will now be starting at $14 an hour -- a pay raise that will increase overall menu prices at the restaurant 12-15%, according to Restaurant Business. The same report says severs will be compensated based on their previous performance, with $14 being the entry wage. Ignite Restaurant Group, Joe's parent company, expects server turnover to decrease, as the move will be at the very least a $12 raise according to Ignite CEO Ray Blanchette, who estimates the starting salary at competing restaurants to be a paltry $2.13 (but obviously offset by tips).
Blanchette also foresees an increased value to customers. In his opinion, customers who were inclined to tip generously will actually end up saving money, as the price increases will equal out to less than 20%.
Prices vary slightly by location, but by using the menu from its Newark, New Jersey location, a bucket of snow crabs that would usually retail at $24.99, would be increased to $28.74, assuming there is a 15% price hike in a post-tipping world. Which actually, isn't so bad.
“We’re really leading in our industry with regards to national brand going out and testing this thing in a meaningful way,” Blanchette told Restaurant Business. “So we want to be somewhat cautious.”
The initial period of no tipping is still to be considered a "test," with some stores rolling out the new program as early as this week, and most expected to make the switch by the end of the year.
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