I never like seeing restaurants offer deals through Groupon, Living Social, restaurants.com or any local provider. First, the cost is too great for restaurants–which already have thin margins–to only receive a fraction of the coupon’s value (e.g. with Groupon, a $100 certificate that sells for $50 gives the restaurant just $25).
Next, too many patrons became conditioned to use coupons; these one-time diners cost the restaurant money. Finally, most restaurants aren’t set up (e.g. don’t have the staffing or expertise) to market to those who use coupons to try to get them to return or buy more while they’re at the restaurants.
I was therefore happy to read the Chicago Tribune cite a study from NPD Group Inc. that says “increased focus on healthful eating and premium options has shifted emphasis from dollar-menu offerings to more upscale foods” and that patrons paying full price has been increasing by one percent each year.
What does this mean to restaurant owners? Concentrate on serving good food that will have customers return for more, not choosing a deal that will have them walk through the doors just once. If you think about some of the most successful/busiest restaurants in Madison, they all serve outstanding food and don’t offer coupons.
Bloomberg food critic Ryan Sutton said “lower food prices don’t make bad food taste better, it simply makes the meal more tolerable. So the moral of the story is that lower prices and ‘good deals’ won’t solves the problems of a bad restaurant.”
Well put.
