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Trade questions restaurant discount vouchers

Published:  20 October, 2011


The jury is out on whether discount vouchers offer retailers and restaurateurs lasting custom or harm trade.

The jury is out on whether discount vouchers offer retailers and restaurateurs lasting custom or harm trade.

Speaking at a Harpers round table held in Manchester last week John Dammone, owner of Salvo's Restaurant and Salumeria in Leeds, warned there is no way back from the discount culture once caught up in the cycle.
"Promotions such as two-for-one meals offered by the likes of Groupon are incredibly strong at the moment, but can also be quite harmful to business."

Dammone said he offered lunch for £5 through the Times a few years ago, which was very successful at attracting new customers but didn't have a lasting effect. He said those consumers that do come spend as little money as possible. "They didn't trade up by being upsold, drank water, and never came back once the offer was finished. I lost money and learned my lesson."

On the retail side Slurp used a Groupon offer last November. Chief executive Dr Jeremy Howard said "the jury was still out" regarding its success. It sold 4,000 vouchers in 10 hours. "Some customers did seem overly focused on the voucher's 'discount' aspect. But we did also acquire a large number of customers who spent well over the minimum threshold and have become loyal and valuable Slurpers," said Howard.

Alexxio Muccio, manager of Manchester's Twisted Med restaurant currently has a two-for-one offer via Groupon and said it is useful to promote the new restaurant, but that longterm use can be harmful. "It is very easy to fall into a trap, it can ruin a business. You have to be clever and know how to utilise it. We are currently making £7 per person on up-sell without compromising on quality."

A spokesman for Groupon said it was "committed to building long-term relationships with partners and will always try to make sure every offer is a satisfying experience to partners as well as customers".

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