Do wacky restaurant promotions actually work?
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Have a restaurant coupon that recently expired? Didn't get around to using that electronics store gift card before it went out of business?
If you live near an Applebee's-- or you haven't been there in awhile-- the chain has an unusual promotion that might get you in the door.
This month, Applebee’s in Texas will recognize gift cards, coupons (even those long expired) and certificates from any kind of business or company. Theoretically, guests could pay for their meal at the restaurant with a gift card from another restaurant, or from a barbershop. But the deal will only cover up to 50 percent off food purchases.
Sure, plenty of non-food businesses offer to compete with competitors by matching lower prices but is this type of promotion enough to help boost flailing casual restaurant profits?
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"I think it's a positive incentive to get people through the door," said Victoria Blamey, executive chef at New York City's Chumley's restaurant.
"I would wonder whether people would come back. It's not just about getting people through the door, it's about getting people back."
As a long term strategy, Blamey wasn't sure if the all-business coupon deal was a good idea-- plus she wouldn't be keen to use the technique at her own restaurant.
Still, in some neighborhoods, a little discount goes a long way. According to FoodBeast, the chain started the unique promotion in an effort to support local communities in Waco and Dallas. Restaurant managers reportedly noticed that many patrons were bringing in expired coupons and gift cards to places they would infrequently visit. So Applebee’s said they would accept them as a partial form of payment-- and in the process generate some promotional buzz.
The chain's move to accept coupons from other restaurants comes amid troubling times for traditional casual sit down bar and grill chains as they face increasing competition from fast casual competitors like Chipotle. According to Nation’s Restaurant News, same-store sales dropped 3.5 percent on average in the last three months of 2016. That was based on the performance of publicly traded chains.
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After earnings reports posted, the CEOs for Ruby Tuesday Inc., Red Robin Gourmet Burgers Inc. and Applebee’s parent company Dine Equity Inc. were each removed from their respective positions.
Restaurant chains’ business models traditionally revolved around guests sitting for awhile-- and having a couple drinks in the process. But the modern era is all about faster service and the onslaught of dining at home through delivery apps. Whether unusual promotions like the one in Texas wind up helping or just becoming a one-off phenomenon will be evaluated at the end of the month.
Others in the industry are doubtful.
"I don't think it's a good way to build revenue but maybe for them [Applebee's], if they did poorly in the last fiscal year, maybe they're just trying to recoup some of their losses," suggested Clarice Lam, chef and owner behind Brooklyn, New York's The Baking Bean. Though she thinks it's good for the chain to have a little bit money (versus no customers at all) Lam says that at least the move was a creative promotional opportunity.
The deal is available for a limited time at all of Applebee’s 67 locations in Dallas Forth Worth, Waco, East Texas and other neighboring locations.
A representative for Applebee's was not immediately available for comment.
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