Where Local and Global Appetites Collide

How are restaurants getting customers in?

In this rough economic recession, people are faced with scarcity and must make a choice on what they purchase with limited funds. Many companies are afraid of going out of business, but it is not just about the current situation. A restaurant in todays recession can still stay in business and make lots of money, they just have to do it right. Many restaurants are searching for new ways to get out there and try to stay in business.

In Toledo, about a week or so ago IHOP was giving away free pancakes all day for International Pancake Day. What did this do? It brought customers into IHOP who would normally not go to let them try the product. Yes, I’m sure that there were people who got the free pancakes and left, but i’m sure that the majority of the people bought other items on top of the free pancakes, helping IHOP make money.

Some people do not think that this will help out, but what it the restaurant going to do? I personally think it is smart to have a free day of food to draw in customers, new or old.

Besides IHOP, it was recently annouced that Denny’s was giving away a free breakfast on February 3rd. All though they have lost money from the advertising and cost of food/production for the free day, they have gained new customers and other important things.

Do you think this is smart for businesses to be doing in such a rough economic time?

Torie Nicholas

  1. Torie,
    That is a good question.
    I think these mega corporations like Denny’s, IHOP, and Quiznos can afford to do this because they get enormous publicity and I’m sure that most people probably spent additional money and certainly — hopefully — tipped the waitstaff.

    The average mom and pop restaurant probably cannot afford to give away free food.

    There are certainly deals out there like buy one and get one free or buy one and get one at half off or free dessert with an entree.

    I have seen some restaurants in Tucson that have special deals once a week like a $5 hamburger at the bar or generous happy hours.

  2. This reminds me of Ben and Jerry’s which gives away free ice cream once a year. Our nearest Ben and Jerry’s is at the University of Dayton – 10 miles away. I have never taken advantage of it because the lines are crazy and it is not worth waiting in line for a $3.00 dip of ice cream, but I honestly don’t think that if I did, that I would go there more often because of it. I think their ice cream is too sweet.

    Yes, maybe this would get new people exposed to their product/service for the first time and they would get converts, but I think for a business to survive for the long-term, they can’t rely on giving away free food.

    I think Karyn is right – instead of losing money on advertising, they are actually getting a huge amount of free publicity that more than offsets the cost of the food. Advertising is expensive. But will people come back time-after-time after the big event? Memory fades and competitors jump in to steel away customers with other enticing offers.

    You are right, in these tough economic times, people must be more discriminating about where they spend their money. I read in the WSJ last week that Buffalo Wild Wings (BW3) is actually making lots of money compared to restaurants like Ruby Tuesdays or Panera Bread. Personally, buffalo wings are the last thing I would spend my money on. Go figure.

  3. I do think it is interesting to see what restaurants are surviving in the current economy.
    For example, I walked into the Panera Bread’s in Hudson today for lunch and it was crazy. I do understand that Hudson is an upper class neighborhood, but plenty of other restaurants in Hudson go out of business. I do not know what Panera is doing to get so many customers daily, but I could not believe how many people were there. The whole place was full and there was a line out the door.

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