Discounting Does Not Play Well

Discounting Does Not Play Well

Just read your Editor's note on discounting. We absolutely agree with those observations. We prefer to create new items that fit the menu profile at attractive price points rather then discount our signature items. Additionally, we have featured unique menu items at a feature price that allow consumers to move around the menu. It is a very slippery slope once one decides to tinker with signature items and the cheapening of their image.Fortunately for our concept, we have great price points for this economy. We have found that our execution of the brand experience and the strategically placed price points on other menu items keep us winning the battle vs. heavy discounting.

Sal Melilli
Chief Operating Officer
Hooters Management Corporation
Clearwater, FL

I work part time as a server in a Chili's restaurant. As you know, and pointed out, Chili's is one of the chains offering the aggressive promotions to try to get people in the door. Unfortunately, as your article pointed out, it's bringing in consumers that only come to restaurants when these deals are offered.As a result, customers are suffering because of forced slower ticket times, forced slower service, etc.

From the server's perspective, we've been incredibly busy for the past month. Our wait times, even on normally slow industry nights, have been an hour or more. The downside is that we're forced to work longer shifts (2-3 hours longer).

In our restaurant, guests are accustomed to a 45-minute ticket. They don't care that the kitchen can't keep up with a full restaurant, even though they see that every table is full and we are on an hour-and-a-half wait.

It seems the lower the price, the higher their expectations. You'd think it would be the other way around. We've had to comp meals and drinks for the most unreasonable of them. I worked at a high-end restaurant and those guests weren't nearly as unreasonable about their $200 dinners as people are for their $20 dinners.

Regardless of how great the service is, the average tip during these promotions is $2 or 10%. So we're barely making minimum wage factoring in the longer hours and claiming all tips. This results in the restaurant having to subsidize any hours during a week we don't average minimum wage. I think many people also still don't realize that we servers are not making minimum wage and our tips are what we count on.

I'm making around $40 less now during a 6-hour shift than I was making in 4-hour shifts. That's $120 less each week based on my 3-night-a-week shifts. That's huge!

Michele J. Terry, CPP
Payroll Supervisor/Risk Manager/Server
Strang Corporation
Cleveland, OH

I believe your idea that restaurants are “training guests to be cheap” is a very valid notion. My philosophy for handling the current tough times is to continue to offer our clients a new reason to visit our establishment. This does not necessarily mean just offering something cheap — instead we're offering something meaningful and doing it on a regular basis. Here are three things we've done recently that have been very successful in putting butts in seats while still adding to the bottom line.

One of our biggest issues in Asheville is that we are on the western portion of a time zone. Guests do not like to dine before 7- 7:30 p.m. To bring people in early, we're offering a $25 tasting menu that is only offered between 5:30-7:00 p.m. We don't call it an “early bird special” because it's something more meaningful. It's a three-course dinner that gives new and existing clients a chance to try the full experience of dining in our restaurant without breaking the bank. Many who would only join us for a special occasion are now coming more often. It also encourages diners to linger and enjoy cocktails and wine, something the table-flipping chains don't encourage. As a result, we've seen weeknight head counts increase but, surprisingly, there is no impact to the overall per head dollar average — a real win-win for clients, staff and the restaurant.

To increase business on slow Wednesday nights, we've done something that some may think is extreme. We run a half-price special on select bottles of wine all day long. This doesn't mean just the glass pours; we're offering this deal on over 50% of the wine list. The purchase of a bottle of wine means the guest will linger, and we encourage them to have a starter or dessert that they might normally skip. Since we offer the deal all day, lunch check averages have increased. Wednesday evening is now more like a Friday night. We have nearly tripled our business.

We've also launched a Sunday brunch, and once again we've again achieved a positive impact to the bottom line. There are many ways to draw attention in this industry without giving away the farm. Something as simple as adding an espresso machine or developing a seasonal cocktail list gives restaurant owners the opportunity to reach out to their client base.

Treavis Taylor
Proprietor
FIG Bistro
Asheville, NC

I have been amazed at the number of businesses who utilize the discount programs of companies like (WhatevercityMenu.com [2]) to try and lure customers into their establishment by offering BOGO or half-off the second entrée. Our café has been in existence for over 23 years and we've always avoided the discount programs because we feel like our prices are very competitive, we have a great product and we focus on delivering the best customer service humanly possible.

We are inundated with companies trying to convince us that we need their services, and they're shocked when I tell them that we do not do discounts. I believe that if you discount you will, as you wrote, be getting only those customers who are looking for a deal and once a deal is done they will search for the next place. We are pacing ahead of our previous year, and we're getting ready to expand our brand. I believe if other operators maintain the ideals that made them successful and do a good job identifying their clientele and marketing to them, we'll be a better industry when the economy recovers.

Michael J. Meeks
Owner
The Express Café & Bakery
Savannah, GA

I have always believed in quality, not quantity. I still use the products I want, but I hunt for what I can discount. I have a 2-for-1 promotion for Cruzan rum. I upped the price from $4.75 to $5.25. What I get is happy customers and a better bottom line because for every case of Cruzan I buy, I receive six free bottles of their well rum. Recently, I started a Wednesday promotion for half-off our vegetarian menu. Originally it was a summer promotion, but I have made it a permanent fixture to the delight of our regulars. We have about 12 items to choose from and we normally get 60 covers just off that promotion. My only stipulation is that the promotion is for dine-in only. Obviously my agenda is for them to have a drink and dessert (and it's working).

Wayne Keller
Chef/Partner
Finnegan's Wake
Key West, FL