KRLD Restaurant Week: Lower Prices May Put Restaurateurs in a Bind
More restaurants than ever are extending their participation in KRLD's annual restaurant week this year, opening their reservation books for a three-day preview and two-week add-on period. But a columnist for CBS's business blog warns that might not be a bright idea.
Writing about the 170 New York City restaurants that opted to keep their Restaurant Week promos going for an extra six weeks, Carol Tice opines: "Run that promotion for nearly two months, and those prices don't feel like a deal anymore to customers -- they feel like an entitlement...customers are now accustomed to these prices and would like them to be the norm."
According to Tice, fast food restaurants that tried to lure in new customers with dollar menus found it was almost impossible to entice hungry misers to shell out any extra cash. Pizza Hut ran so many promotions for cheap large pizzas that the chain couldn't unload regularly-priced pies: The restaurant last week permanently lowered its large pizza price from $19 to $10.
Yet it's hard to take the long view in the throes of a recession. As a New York restaurateur told Crain's, "the more value we can give, the better we are."
That's apparently the philosophy subscribed to by the more than 60 Dallas restaurants making their prix-fixe menus available through September 5. The Landmark, which is prepping to close for renovations, is getting a head start on discount season, offering a $30 three-course special through August 15.
Tice calls the situation a "double-bind," saying customers might not return to restaurants that eventually rescind their sales. But restaurants that don't participate in the promo may not see any customers at all.