Why isn’t 29 riyals on HungerStation the same as 29 riyals at the branch?

1Same dinner, two prices

It’s 11 pm. A young man at home orders his usual from the app: a shawarma sandwich and a Pepsi. The total looks fine until he notices one small thing. The Pepsi he buys at the branch for 4 riyals costs 8 here.

He didn’t stop at the shawarma. He stopped at the Pepsi, because he knows what it costs. He’s known since school.

The next day he tells his friends at the istiraha: “That place is ripping people off on the app.” Notice he didn’t blame the app. He named the restaurant.

The irony is that the gap may be perfectly justified. The platform takes a commission, packaging costs money, and the order goes through the same kitchen at the same peak. But the customer doesn’t see your cost sheet. He sees two numbers, and he remembers one of them.

2The ruler above the till

Every branch has a menu board hanging above the till. The owner sees a price list. The customer memorises a ruler.

Every price they see after that gets measured against it: in the app, in a promotion, at your new branch in the mall. They don’t ask, “Is 29 riyals fair for this meal?” They ask, “What was it at the branch?”

That’s why 29 riyals in the app isn’t 29 riyals at the branch. At the branch it’s the price. In the app it’s the price plus a gap, and the customer works out the gap on their own and gives it a name. If you don’t name it, they will: “a rip-off”.

But the ruler is short. Nobody memorises the whole menu. They remember a handful of prices: the drink, the signature item, the meal they order every week. The family box that exists only in the app has no ruler at all.

3The idea beneath the price

More than forty years ago, Daniel Kahneman and Amos Tversky showed that people don’t judge numbers on their own terms but against a reference point in their heads, and that what looks like a loss from that point hurts more than an equal gain pleases.¹ In a restaurant, that point is the reference price: the number the customer remembers from the board.

Then Richard Thaler gave us a now-famous example. A man lying on the beach wants a cold drink, and a friend is going to fetch it. How much is he willing to pay? People accepted a higher price when the drink came from a fancy resort hotel than when it came from a small grocery store, even though the drink was identical and nobody would set foot in the hotel.² Thaler’s lesson: the customer pays for two things, the item and “the deal”, meaning their sense that the price is fair for that place. They keep a separate account in their head for everything (mental accounting), and they judge you on the deal as much as on the meal.

Pricing scholars such as Hermann Simon and Thomas Nagle added the practical step: start from value to the customer in that moment, not from cost alone.³ Someone ordering at 11 pm from their sofa isn’t buying what the person at the till buys. They’re buying the meal plus a trip they didn’t make. So the right question is: what makes the gap worth it to them, and how do you let them see it?

The gap isn’t hypothetical. In a 2023 survey by Al-Eqtisadiah of 60 meals from 10 restaurants, app prices were higher than branch prices by about 24% on HungerStation and The Chefs, 23% on Jahez and two other apps, and 22% on Mrsool, while on Mandoob the difference was just 1%.⁴ One example from the same survey: a Pepsi went from 4 riyals to 8. In January 2026, Argaam reported gaps ranging from about 20% to over 80%, depending on the meal and the platform.⁵

So the gap varies by platform and by item. There’s no single “average” to benchmark against, and no rule that forces a particular number on you. And tax isn’t the reason: VAT is 15% on both channels.⁶

4Where the money leaks

Mistake one: raising app prices without distinguishing between items. It looks fair in the spreadsheet, but it puts a visible gap on exactly the items customers know by heart. You make a few riyals on the Pepsi and pay for them in reputation.

Mistake two is the opposite: keeping app prices equal to branch prices for fear of backlash. Then every order pays the platform’s commission, the discount and the packaging out of your margin, and there may be nothing left. Revenue rises, contribution falls, and you only notice at month-end. That’s why we judge each channel by its contribution after commission, not its revenue.⁷

The fix isn’t one number. It’s a price architecture across channels. Split the app menu into three kinds of item:

• Ruler items: few and memorised. Keep their gap as small as possible, or zero.
• Ordinary items: a moderate gap you can explain.
• Channel items: boxes and family meals designed for delivery, with no twin at the branch. This is where you recover the channel’s cost, because the customer has no ruler to measure them against.

Where the platform’s terms allow it, name the gap. “Delivery prices” is clearer than a silent difference the customer discovers alone.⁸ And this is no longer a secret: newspapers compare the prices, and according to Argaam, the General Authority for Competition is monitoring delivery apps.⁹

5The Sunday-morning question

One question, one metric, one rule

7You choose the ruler

A price isn’t a number you write. It’s a comparison your customer makes. And you get to choose what they compare it with.

None of this is my invention. The reference point comes from Kahneman and Tversky (1979), mental accounting from Thaler (1985), and value-based pricing from Hermann Simon and from Nagle, Müller and Gruyaert. All I did was carry it from the economics books to the board above the till.

And if your fix is to launch an app discount to make up the gap, ask one thing before you celebrate the numbers: would those orders have come anyway? That’s the next episode.