Seeking Alpha

A tip to casual dining chains: Lose the discounts

  • Casual dining chains lost close to 7.1M visitors between 2009 and 2013 as fast-casual superstars such as Panera Bread, Chipotle, Noodles, and Pei Wei stole traffic.
  • The response from the sector has been to push heavily on the promotional lever in a margin-biting gambit. The latest is a $10 all-you-can-eat appetizer price deal from the struggling TGI Friday's chain.
  • Restaurant Finance Monitor thinks the strategy is ill-fated, noting Buffalo Wild Wings (BWLD +1.9%) and Red Robin Gourmet Burgers (RRGB +0.5%) have done well by pushing the distinct experience of a visit to their restaurants - instead of hyping endless discounts.
  • Related stocks: CAKE, IRG, DIN, DENN, EAT, CBRL, BLMN, FRS, RT, BOBE, BDL.
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Comments (8)
  • jumpnjoey77
    , contributor
    Comments (603) | Send Message
     
    Baaa, I received 3 coupons from RRGB in the last week.
    9 Jul, 12:54 PM Reply Like
  • jumpnjoey77
    , contributor
    Comments (603) | Send Message
     
    15% Off All Month Long!
    Buy 1, Get the Second 50% off!
    Celebrate the 4th with 20% off!
    9 Jul, 12:58 PM Reply Like
  • Philip Marlowe
    , contributor
    Comments (1067) | Send Message
     
    So how would you feel if someone takes you on a date and whips out one of those buy 1 get the second one 50% off coupons?
    9 Jul, 01:16 PM Reply Like
  • TaxCollector78
    , contributor
    Comments (2) | Send Message
     
    So how would you feel if someone took you for a date to Red Robin?!
    9 Jul, 02:06 PM Reply Like
  • jumpnjoey77
    , contributor
    Comments (603) | Send Message
     
    Well played.
    9 Jul, 06:32 PM Reply Like
  • lovesdos
    , contributor
    Comments (49) | Send Message
     
    cbrl does not use promotions on the food
    9 Jul, 01:16 PM Reply Like
  • user 419955
    , contributor
    Comments (11) | Send Message
     
    To me - if you can provide coupons/discounts on food, you can lower your prices. Maybe this will bring the customers back and add new ones. Advertising would help also - especially in lowering food price. Another would be to update d├ęcor.
    9 Jul, 02:23 PM Reply Like
  • user 419955
    , contributor
    Comments (11) | Send Message
     
    I believe if you can offer coupons or discounts - you can lower your prices. That would be one thing that would bring back customers. Advertising would be another. I've not seen a commercial for DENN in a long time. DENN should also take advantage of truck stops. This is a captive audience, but serving needs to be sped up,maybe not as fast as Panera Bread, Chipotle, Noodles, and Pei Wei but need to get away from service that has customers sitting down for an hour or two.
    9 Jul, 02:38 PM Reply Like
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