NPD Group reports that at the end of August 2008, almost one quarter (23%) of all restaurant traffic resulted from consumer-perceived “deals” – with the majority of them in quickservice. Bonnie Riggs, restaurant industry analyst for NPD, says that all types of deals are increasing across the industry. “Deal traffic is up 10%, mostly in quickservice,” says Bonnie. “However, every restaurant needs to have a strong value proposition in this economic environment.” Fred LeFranc, ceo, Results thru Strategy, Inc., agrees. “Maintaining traffic is the goal, and in every segment, restaurateurs need to create opportunities – that don’t appear desperate or cheap – for people to walk through their doors.” Even restaurants that have never taken these approaches are doing so. “In the life of our company, we’ve never discounted a menu item or couponed,” says Phil Roberts, ceo, Parasole Restaurant Holdings, based in Edina, MN, “However, we are definitely introducing menu items like our Sunday Night Dinners (buy two, pay $8.95 each), which are priced considerably below our normal average check. We consider them ‘safe harbors,’ so that no one can veto dining with us because of price.”
Price-based promotions are powerful. Perhaps, due in part to what Fred calls a complete recalibration of consumer expectations. “It’s becoming chic to be frugal,” he notes. According to a recent consumer survey by the National Restaurant Association, 75% of adults say they would patronize fullservice restaurants and 66% quickservice restaurants more if they offered discounts for dining on less busy days of the week. Fred has a different strategy. “I think it’s important to fish when the fish are biting. In other words, start by doing promotions on your busiest days, as they’re easier to build up,” he says. Regardless, restaurateurs who are successfully using deals and discounts to drive traffic say it’s important to make sure they are appropriate and relevant to the brand and to use a variety of promotions so consumers stay interested. “In this market one needs to keep it fresh – otherwise the offer or discount becomes the accepted price,” says Chick Marshall, owner, Mr. Stox, Anaheim, CA.
For example, The Common Man, based in Ashland, NH, offers weeknight deals at their Airport and Tilt’n Diners: Monday, kids eat free; Tuesday, the manager flips a coin to buy half of the table’s entrees; Wednesday is all-you-can-eat spaghetti; Thursday, buy-one-get-one-free for college students with valid i.d. “The plan is to appeal to everyone at some point during the week,” says Erica Murphy, communications director. “People really get a kick out of the manager coming to the table on Tuesday nights to flip the coin. A little humor is a good thing”. . . At Galway Tribes Irish Pub & Ale House, Frankfort, IL, lunch is discounted 15% for different occupations each weekday (Monday – tradespeople; Tuesday – autoworkers; Wednesday – salon workers, police, and firemen; Thursday – professionals; and Friday – educators). “We’re having fun and customers are very appreciative,” says Niall Freyne, owner. “Now the local clergy are calling, asking what day is theirs.”
Most agree that it’s a time to be bold – to make consumers offers they can’t refuse. Marina Café, Destin, FL, offers a 20% discount on the entire menu every day, excluding holidays. “A discount of this size helps keep locals interested in the off-season,” says president, James Altamura….On Mondays and Tuesdays at lunch and dinner, Park Avenue Bistro, New York, NY, pays for the lowest priced entree, when two entrees are purchased. “I know people are hurting and I want to help them out,” says Tim Brown, owner. “It’s less expensive to dine with me on those days than it is to shop and cook at home.” Tim sent an email announcing the two-for-one to his customer list, and word of mouth grew, which also resulted in major media coverage . . . .Chick says Mr. Stox offers a $35 four-course dinner for a limited time (five weeks) a couple times a year. “Our average check is $60 per person, so this dinner promotion is a tremendous value to our customers,” he says. “We treat most of the cost to us as a marketing expense.” Fred recommends laying out a calendar of limited-time offers for the year, based on seasonal sales trends, to avoid scrambling at the last minute. “It looks like 2009 is going be ugly, so be prepared,” he warns.