The 2-for-1 offers and discount vouchers that currently characterise the fast casual sector of the restaurant industry will continue to drive trade throughout the recession and long after it has ended, according to Martin Lewis, the man behind money-saving advice website Moneysavingexpert.com.
“Vouchers are here to stay,” he told Restaurant magazine. “Saying otherwise would be like saying that there won’t be any more sales once the economy gets better. Vouchers give companies the ability to discreetly discount to the growing group of price sensitive customer, whilst not cannibalising walk in trade.”
The sustained use of vouchers will have serious consequences for discounting operators’ profit margins and the fortunes of independents, which will struggle to compete on price. Already there has been intense competition amongst high street restaurants for business, with the vast majority of operators offering some sort of offer, 2-for-1 on main courses being the most popular mechanism to discount food by 50 per cent.
Views of Lewis’s voucher page have been steadily increasing since it launched in June 2008, and in January this year the page received a staggering 1.4 million views.
For many chains, discounted offers are having the desired effect of getting bums on seats. But the boss of a UK restaurant group thinks excessive discounting is dangerous. “Some groups, it’ll end up being 25 per cent of their business. I remember this from ’91-92. It’s so viral and so bloody. People are going to do some desperate things.”