Restaurateurs need to discount

3rd December 2008, 11:07am

Restaurants, pubs and fast food outlets need to tempt consumers with discounts, set-price meals and value-added offers to boost footfall during quiet periods in the run-up to Christmas, says market analysts Horizons.

Peter Backman warned that as the public gets used to sales and discounts on the high street, they are becoming reluctant to pay full price for anything – including meals out.

He said: "Almost every non-food retailer on the high street has slashed prices to encourage consumers to spend. Restaurants, pubs and fast food outlets have to do the same to raise throughput of customers at quiet times – typically early in the week and lunchtimes.

"As the economic climate worsens customers are cutting back on their eating out. The popularity of shopping on-line is also a threat to restaurant operators as it means less people on the high street. Feedback I have had suggests Christmas looks bleak for the eating out sector. Some corporate hospitality organisers have seen up to 80% of bookings cancelled as companies are reluctant to go ahead with Christmas parties."

Last year many experts advised restaurant operators not to devalue their product by discounting. But in less than 12 months the market has changed significantly.

Backman continued: "Consumers now have a massive amount of choice when it comes to eating out. Pubs, restaurants, and fast food outlets have all raised their game and are competing for the same consumer. Clever operators are now offering discounts that encourage people through the door but enable them to benefit from higher margins on drink, for example."

Examples of discounts running in some London restaurants this week include 'free meal on your birthday', 'two for the price of one', 'credit crunch lunch', '50% off the food bill', and 'set price menu and a free glass of Champagne'. Others were tying-in with theatre ticket sales by offering a value-for-money package including dinner, drinks and theatre tickets.

Backman predicted: "The economy is likely to be depressed throughout 2009, and probably into 2010. Restaurateurs must prepare for this by continuing to monitor and control costs, buying more efficiently and doing their utmost to keep customers coming through the door."

Over 1,000 retail businesses have collapsed over the past year, while pubs are said to be closing at a rate of five a week.

Related Articles:

• 10 Jun 2009 - Eating out is falling after hitting new high
• 28 Apr 2009 - Supermarket meal deals threaten eating out

Click here to submit a comment!

Have your say!

To comment on this article, simply enter your name and email and send us your views. Please note that your comment will appear publicly below this article once it has been processed. For enquiries please email info@eatoutmagazine.co.uk.