Longtime Denver restaurant consultant John Imbergamo brought up some good points when he disagreed with my comparison of Restaurant Weeks with daily-deal websites. He shared his comments in this interview, along with insight about what restaurants can do to set themselves apart from the competition and challenges they likely will face in 2012.
What do you see as the difference between daily-deal sites such as Groupon and Restaurant Weeks?
Discounting in general and deal sites in particular can be predatory and unproductive, especially when repeated frequently. The deal-site originators keep a large percentage of the revenue generated, putting a further strain on profitability. They mainly attract bargain hunters, whose singular reason for buying the deal is to get the deal. Most importantly, the duration of the offer forces the restaurant (and its worn-out staff) to serve meals in the final month of the coupon that were only partially paid for in the first month. Deal sites are the modern, electronic replacement for the buy-one-get-one-free books sold by schoolchildren for decades. Many of the deals are damaging to brand and reek of desperation.
My experience with Denver Restaurant Week(s) is much different. It began, and continues to be, a celebration of Denver culinary talent. Restaurants that would never do a deal site choose to participate in Restaurant Week to be part of the overall community. Our celebration lasts for only two weeks. (We’ve tried in vain to get the organizers to split those into one week in the spring and another in the fall.) While the staff in the busiest restaurants are tired and beat up by the end of Restaurant Week, at least the economics are more sensible and controlled by the restaurateur. The restaurant can engineer a menu that works for the advertised price even if the guest doesn’t buy any additional items.
What factors or qualities tend to make some restaurants book up first? Is it only price, or does it have more to do with menu, type of cuisine or something else?
Our experience in Denver says that Restaurant Week guests mainly come in two sizes. Those who are searching for the biggest value are making reservations at the big steakhouses and the all-the-meat-you-can-eat Brazilian churrascarias. The second group is looking for experiences that they could not normally afford. Fine-dining restaurants that never discount are part of Restaurant Week, and these are wildly popular.
In addition to promotions such as Restaurant Week, what are restaurants doing to drive traffic and set themselves apart from competitors?
I recommend unique promotions that add value but do not involve discounting regular menu items. At Euclid Hall Bar & Kitchen in Denver, we proclaimed January Beer Month and are tapping a new beer every day for the entire month. At fine-dining Rioja, Tuesday Sips and Snacks feature four tastes of wine paired with four bite-sized snacks from the kitchen for $15 in the bar. At Panzano, we’re promoting Bottomless Bellinis during breakfast and brunch for $9.
Additionally, I recommend that restaurants take a look at strong, professionally done programs in specific areas of the menu. Having the best tea choices and service or having a beer expert on staff and the biggest craft-beer selection in your town might be enough to make you unique in the market.
Do you think keeping traffic up and bringing in additional business will be more or less challenging in 2012 than last year? Why?
There doesn’t seem to be any simple answers to this. My feelings are the challenges for the restaurant industry will probably reside on the cost side of the business in 2012 rather than the volume side. For Denver, 2011 was a good year, if not great. Increased use of discounting, onerous government regulation and strong commodity food prices will make it much more difficult to turn a profit in 2012.