How Do Restaurants Use Pricing to Drive Traffic on Slow Days?

How Do Restaurants Use Pricing to Drive Traffic on Slow Days?

Use Pricing to Drive Demand

Ever bought pizza on a Monday?  Not too many people do.  Most people take time to enjoy their weekends and recharge for the week ahead.  This includes eating out and doing other things they enjoy (as well as tasks around the house).  By Monday, they are back hard at work or taking the kids to school and don’t really think about a visit to their favorite pizza parlor.  However, most pizza places and all of the pizzas chains are open on Mondays.  They do this because they want to always be there to meet your needs whenever you are in a buying mood.

This presents a problem because it is expensive to keep the store open.  In fact, the revenue on Mondays at many pizza stores does not even pay for the labor and food costs on a Monday.  Owners want to get more revenue than the stay open costs so they can have something left to cover the rent, utilities and the rest of the fixed costs.

The solution is to have heavily discounted specials on Monday to drive traffic.  If the store can sell pizza above the food cost even with the discounts, they will be ahead of the game.  If a pizza is normally $9.00 and they sell it for $5.00 they will typically make $2.30 to $2.75 because food costs are around 25% to 30% of normal price.

A restaurant my wife and I enjoy in Newport has $10.00 entrees on Mondays.  This represents a discount of 40% to 60%.  The place is packed and many people are having a drink.  It must certainly be working for them because it is still hard to get in for dinner on Fridays, Saturdays and even Sundays.

Many restaurants use discounts to drive traffic on slow days.  The trick is not to draw off full price customers from other days but to generate traffic you would not have had.

For more information on using pricing to drive customer behavior, click on this link.

Bryan B Mason

Apollo Consulting Group, Newport, RI

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