There is tremendous competition for your food dollars in NYC. That alone forces food places to either be affordable and good or expensive and great.
Great point. Pretty much anywhere on earth the theory of supply and demand reigns supreme. But in New York, even a theory as mighty as this one gets pushed around. That\'s not to say it\'s out the window by any means. It\'s prevalent every day in New York. But there are enough unique and outstanding forces acting upon the New York market to severely dampen the strength of supply and demand.
1. New York loves the hot trendy thing. Hot trendy things are usually priced higher than the nearest similar version. A pizza restaurant (or anything else) in New York will often
raise the price to enhance the perceived value. When two pizza restaurants are a block or two apart and making virtually the same pie for the same price, one is very likely to raise their price so that they are perceived as being higher quality.
2. New York is a bitch to get around. Conveniece plays a monstrous role, especially when it comes to low-cost convenience items such as pizza. Residents, especially in Manhattan, walk to everything. There is enough money going around (at least in Manhattan) to negate much of the advantage of being lower-cost. Being priced lower than the guy 5 blocks down doesn\'t do you much good if nobody\'s going to walk the extra 5 blocks to save $2 anyways. This removes a lot of incentive to be lower priced.
3. On any given day, half of the people in Manhattan are tourists. The vast majority of them are not out to price shop. It requires far too much effort. Whatever it is they are looking for, they will almost always take the first thing they see regardless of price. This is incentive for stores to keep prices up. In addition, those people who do end up choosing from similar alternatives based on price are just as likely to go to the higher priced option for perceived quality as they are to go to the lower priced option to save a few dollars. Again, more incentive to keep prices up.
BTW for those who it matters to, when I say New York I pretty much mean "Manhattan" since that\'s where I lived and it\'s what everyone from outside thinks of when they hear "New York." I\'m sure there\'s plenty of good pie in the other boroughs.