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October 29, 2013
Last year it looked like pressure to discount had turned the corner, but it looks like restaurant customers are back to counting on deals.
Restaurant visits based on a buy some/get some premise or BOGO have grown 14 percent this year compared to 2012, according to consumer research by NPD Group.
Villa Fresh Italian Kitchen’s BOGO offer is one of many efforts to drive traffic.
It’s no surprise that casual eateries have been aggressively offering these discounts this year, primarily as a way to shore up traffic. But the firm says visits were down by 1 percent for the year ending August 2013. Visits tied to discounted prices grew by 4 percent, while coupon-related visits rose 2 percent.
Deals and special offers were common at the height of the recession, NPD notes, but by last year visits dependent on deals were declining and more guests were paying full prices.
“In my view the industry tried to move away from heavy discounting last year but found it was just not feasible with consumers still closely watching their spending,” says Bonnie Riggs, restaurant industry analyst for NPD. “It is deal-related traffic that is keeping the industry from registering traffic losses.”
The casual dining sector, Riggs says, is still seeing declines in visits. That trend suggests that the offers out there aren’t resonating with cost-conscious customers.
How well do deals work? After critics complained that daily deals aren’t a panacea, Groupon launched a tool that gives businesses a way to measure the success of their deals.
And an alternative tack adopted by many restaurants is the old-fashioned loyalty club. A study earlier this year explained why this strategy might make sense for many restaurants.
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