Restaurant Discounts: The Difficulty of Pricing in a Down Economy

As the economy begins to take tentative steps toward recovery, some restaurant owners are beginning to see a resurgence in customers with an appetite for their favorite dishes and less of a regard for deals or discounts. The NPD Group recently released a report that supports this trend.

According to the report, the number of diners placing a priority on deals and discounts has dropped significantly over the past twelve months. Last year approximately 29% of those dining out placed a priority on restaurant discounts. This year that number has dropped to an estimated 22%.

Reaching Restaurant Clientele through Social Media
Even so, Restaurants & Institutions 2010 New American Diner Study discovered that almost 60% of customers place a priority on price over all other considerations. So, what is the best way for a dining establishment to position itself in light of these seemingly conflicting results?

The answer seems to be multipronged and involves, at least in part, the use of social media sites which are rapidly becoming part of many consumers daily routine. In fact, another thing the Restaurants & Institutions study discovered is that 63% of respondents expect to find discounts, deals and coupons when connecting to a restaurants’ Facebook or Twitter page.

Groupon
Groupon.com is an increasingly popular site offering subscribers discounts on things to do, see and purchase in their cities. These deals include restaurant discounts. Leveraging this site requires zero upfront costs to restaurant owners as Groupon.com retains a percentage of every “groupon” sold.

Groupon.com has over four million subscribers and according to Groupon.com, its clients spend 60% over the value of the groupon on average. As a result, restaurant owners could potentially improve their business with very little time, effort or money spent on marketing simply by offering a restaurant discount on Groupon.com

Portion Choices as a Pricing Strategy
In a recent post, we discussed the issue of portion control and the 70% of diners who stated in a survey that portions are unnecessarily large. For restaurateurs who don’t want to be defined by price, controlling portion sizes may be another option. When portion sizes are reduced, prices naturally drop as well.