Restaurant promotions: assisted suicide

Loss-leading menus, inexperienced temporary servers, and deal-seeking diners who are unlikely to return: Week-long dining deals are a recipe for restaurants to fail.

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Chef/owner William Belickis of Mistral Kitchen, a Restaurant Week participant

Loss-leading menus, inexperienced temporary servers, and deal-seeking diners who are unlikely to return: Week-long dining deals are a recipe for restaurants to fail.

They've been known by several names: "25 for $25," "30 for $30," and "New Urban Eats." Now these promotional events are called Dine Around and Restaurant Week, and the current edition of Seattle Restaurant Week runs through Oct. 28, excluding Friday and Saturday nights. Restaurants promote themselves with three-course meals — $15 for lunch, $25 for dinner — in hopes of luring new customers to their stores. 

But restaurants aren't grocery stores, which have a long history of loss-leader weekly specials; they're more like small manufacturing businesses, and it's a mistake to think they recover the costs of money-losing promotions. 

It's bad math for a restaurant owner to think he can make up the cost of these promotions by doing more business (the argument that "we lose $10 on every widget we make, but we make it up on volume") or by acquiring new customers (assuming patrons return when prices return to normal). And it's wrong for customers to wait until prices drop (often by half) to visit a new restaurant.

For the current promotion, each participating restaurant contributes $750 to a nonprofit association, Seattle Restaurant Cooperative, which purchases advertising. Of the 106 restaurants that participated in the promotion last spring, 97 percent reported an increase in revenue, according to spokeswoman Heather Jensvold, and the number of participants this time around has risen to 126. (An earlier version of this story erroneously reported that the cost was "nearly $1,000" and that the money was paid directly to The Seattle Times.)

Still, many regular customers flee their favorite haunts during these promotions. Some, no doubt, take off for the competition's cheap meals; the rest don't want to be anywhere near the relative chaos of Restaurant Week and its ilk.

Menus get more complicated (because the restaurants want to put their best feet forward), service is less polished (because the servers have less training on the temporary menus, or have been hired just for the week). Not many restaurants are equipped to handle a nightly influx of double the number of regular guests. The newby guests, furthermore, tend to be lousy tippers (perhaps in response to lousy service, perhaps because they have no intention of ever returning). 

Assume for a minute, though, that all goes well — that a small, neighborhood mom & pop gets through the 10-day "week" with 500 customers, twice as many as usual. Whatever the restaurant's normal average check (let's say $50), it's going to be less during the promotion. Some higher-ticket restaurants face a drop of $20 per customer during Restaurant Week. 

No restaurant owners would speak for attribution, but many face the approach of promotional weeks with the excitement of Opening Night and the dread of a trip to the dentist. Yes, promotional events put "butts in seats" (as the saying goes), yes they help fill "excess capacity." But restaurant seats are not like empty spots on the "Ride the Duck" tour bus;  it costs money to cook and serve meals to each additional customer. 

Many restaurant cooks approach Restaurant Week promotions with their customary macho swagger and competitiveness. They've got to produce a three-course menu for the standard 35 percent ingredient cost or they're in deep trouble. And the menus themselves are public knowledge, published on The Seattle Times' website. "My $8-food-cost menu is going to blow you away," they say to their rivals down the street. You look at the dishes, and you know somebody's not being entirely truthful; there's no way you can put that much food on a plate for $8.

Assaggio, maybe. At dinner ($8 ingredient cost): a salad, some braised pork shoulder, gelato; at lunch ($5 ingredient cost) soup, pasta, panna cotta. But Rover's? At dinner: smoked salmon, Pacific cod with lobster mushrooms, espresso crème brûlée for $8? Impossible. Fine, you say, owner Thierry Rautureau spends more on ingredients. And I say, either he's got to make it up somewhere else or he's willing to lose $5 a plate (or maybe much more) in the name of bringing in new customers.

And assuming that's true, I have two more questions for restaurant owners: Why in the world would you turn your back on your regulars, who support you and your elegant, high-priced dinners year-round, for the purpose of bringing in dozens of bargain-hunting cheapskates who would never pay your everyday prices? (If General Motors sold Cadillacs for $5,000 for one week a year, why would you buy a Cadillac when it's not on sale?) Why, in other words, are you training your customers to pay half price? Promotions like Restaurant Week are self-inflicted poison, slow suicide. If I go to a participating restaurant during the promotion, I'm abetting the suicide.


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About the Authors & Contributors

Ronald Holden

Ronald Holden

Ronald Holden is a regular Crosscut contributor. His new book, published this month, is titled “HOME GROWN Seattle: 101 True Tales of Local Food & Drink." (Belltown Media. $17.95).