…and for that matter, LivingSocial, Groupon and the defunct DealFind and TeamBuy (both of which expired owing merchants money). As appealing as it is to save money, the best way to do so is simply to be frugal in your range of purchases, while respecting the cost of their production…not stepping it up, while paying less for everything.
Eventually, someone has to pay for it and this may be your retailer, or their staff…or other consumers, but why should they? One way or the other, it’s got to affect either quality or sustainability of the enterprise, and ultimately has a huge social cost from lost revenues and the related inability to service the needs of the business.
Any high end restaurant that participates in one of these plans is doing so because they feel that the short term gain of having cash flow is servicing their ongoing bottom-line.
Like PayDay Loans, these programs take something away that can never be replaced.
The truth is that the money has to come from somewhere. Either out of the enterprise…as sometimes does happen, which is part of what bothers me about these sorts of programs; or it is spread out in overall higher prices to compensate, which is a good chunk of the rest of it .
Overall higher prices is also something that many restaurants would find it difficult to do while retaining their regular client base.
One thing that often happens in these promotions (and on Valentine’s Day btw), is the adding of extra tables or chairs, diminishing the overall experience for the diners.
Here’s a great blog post from Denmark on the topic:
We keep getting those phone calls. “We have a great deal for you!” a young and ecstatic “entrepreneurs” voice says ” we fill your restaurant and you make more money!” – and this young entrepeneurs voice just says no, no and no.
Why is it so hard to understand that as soon as some “entrepeneurs” are supposed to “help” you (pls notice the extensive use of “” so far in this post…it’s a sign that I am emotionally involved in the matter) it will cost someone money? Money that will not give your guest/customer any value or make your life easier since you have to dump the prices on your menu in the end making you maybe swap to conventional eggs rather than organic and maybe eventually even cut off some staff? Many of my colleagues are drawn to the idea of filling up the restaurant on slow weekdays and I’ll be honest with you, even despite our privileged history of success we sometimes struggle to fill up the restaurant on a snowy, grey and cold Wednesday in February. Of course the idea of making less of a revenue per guest but still making a higher total is tempting but everything comes with a price and giving discounts might prove to be a disaster. So how does adding another factor to your price (the “entrepeneur”) and dumping your price at the same time add up?
My fear is that the types of home pages as sweetdeal.dk, greed.dk and dealhunter.dk are multiplying as a cancer on our industry and will eventually revert the great progress that the Copenhagen food scene has undertaken in the last ten years. With the fine-dining scene rise to stardom and international fame the middle range restaurants has improved with it giving you more and more value for money when you spend between 500-1000 kr per person. The higher volumes of these types of restaurants demanding varied vegetables and high quality produce, are able to support young and progressive farmers wanting to focus on sustainability and just plain out good food. This system is fragile and as the number of restaurants grow, and competition alike, the focusing in discounting might shift the balance from the busiest restaurants being the best to the ones dumping the price the most to come out on the other side. And this is at the cost of good food because in my opinion, if we had to shift from Hindsholm pork and organic eggs to conventional s**t to be a successful restaurant I wouldn’t have the heart to call us successful, I would call it a disaster.
Now Diningweek.dk has had a few years of great growth and success selling as much as 50.000 tickets offering a 3-course menu for 200 kr at one of the “best restaurants in the city” (- here we go again) and I was horrified to see how Politiken, one of the leading Danish newspaper had filled most part of their lifestyle section with a huge ad from Dining Week, basically listing up all the restaurants participating. To call it the “best” is a bit out there but the biggest problem is how this organization and event is portrayed as a festival celebrating gastronomy. For 200 kr you get 3 courses (and a bottle of San Pellegrino) in week 7- notoriously a tough week for the industry- and all the restaurants are happy to fill up their restaurants- right? But how is this celebrating gastronomy? Beside that the few people going out in that week will probably be tempted to choose the cheap night out not considering the potential consequences? What never seems to be put out there is that Dining Week is arranged by Cofoco, a big restaurant chain counting numerous restaurants in the lower-middle range as Höst, Trois Cochons and many more. All these of course participating in the “festival” and I guess like all the other restaurants paying a 20 kr fee per booking to the Cofoco-headquarters for their participation. 20 kr doesn’t not sound like much for a guest in your restaurant but considering the 50.000 -and growing- sold tickets it might even turn out as a pretty good deal for these “entrepeneurs” as well. The big questions is if we will let our industry face the same trouble as retail, suffering customers waiting for the SALE signs to pop up all over the city before buying anything but a Christmas present. Or wether we want to react and understand that as soon as someone wants you to dump your price they are not out to help you, they just want to be an “entrepeneur”. We are not like retail- we make a craft with our hands. Nothing we do at Relæ is produced in China by cheap labour or outsourced to India. The veggies are browned locally, the fish is butchered in house and we make our own bread with flour made from Danish wheats and we cannot afford to go on a discounting frenzy because the only thing we would be able to cut the price on by now would be quality. We are not like retail and we need to admit that a reasonable pricing of our menus is the only way to go. Some customers will always go for the discounts and I don’t blame them. We just need to take responsibility for what we do and make sure that we always, always, offer a great value for money and this way smudging the “best” off on the Dining Week ad. Because if you truly make quality you shouldn’t want to see your self on this or any others “entrepeneurs” homepage, portfolio or list.