Is Restaurant Week a Wise Idea for Your Restaurant?

Restaurant Week is not about Restaurant Week at all. It’s about what customers do the other 50 or so weeks per year. However one feels about Restaurant Week, one cannot dismiss the increase in traffic that restaurants that participate in restaurant week enjoy nor can one assume that the traffic will result in new regular customers. So we will go about it methodically looking over restaurant week and what it does and doesn’t do, using New York City’s Restaurant Week as an example. Being so large, NYC Restaurant Week puts the problems restaurants may confront center stage.  In NYC, it takes up more of the year than most cities. It’s now twice a year and covers several weeks, leaving only 46 weeks when restaurants must go about business as usual.  We will try to get you started on thinking about restaurant week as a business and marketing move. Besides, every restaurant considering involvement in restaurant week should analyze the numbers beforehand to see what they are getting into.

Avoid Over-Saturated Restaurant Weeks

Let’s do some of the numbers courtesy of Yelp. A search on Yelp provides a quick reasonably accurate way to figure out the number of restaurants in a particular area (and how pricey they are). Yelp lists closed restaurants for a while, but they make up a small portion.

In NYC, more than 320 restaurants participate currently in restaurant week. With few exceptions, these restaurants are located in Manhattan. Although there are 16,000 or so restaurants in the five boroughs of NYC, about half of them are in Manhattan. Because of the pricing, Restaurant Week, however, works only for more expensive restaurants. I used Yelp, and filter the search so I only had the top 2 categories in price. Doing this, the number of Manhattan restaurants shrinks from more than 7,000 restaurants to 1,240 restaurants. My estimate is that 25 % of Manhattan fine dining restaurants participate in NYC Restaurant Week.

In my opinion, that’s a lot, especially for the discounts many restaurants are offering. These are painful reductions in price regardless of how restricted the menu is. I do not doubt there will be a bump in business (at least gross), but I can only wonder how many customers who know nothing of your restaurant would make a reservation.

As we can see by the numbers, in terms of marketing, NYC Restaurant Week is not a very strong way to stick out in your neighborhood, unless you are in Park Slope in Brooklyn. For the one Park Slope restaurant that is participating, this is very smart move because it is a restaurant in an affluent area. Many people who live there work in Manhattan and come to know of NYC Restaurant Week from their jobs/lunches. In the neighborhoods of repute in Manhattan, Restaurant Week is overwhelmingly concentrated and people are more likely to try out whatever they have been curious about in the past but the price caused them to hesitate.

Two Trouble Groups: Familiar And Out-Of-Price-Range Customers

Inevitably, a portion of the customers will be not new. These customers see Restaurant Week as just another chance to come to your restaurant and the reduced price gives them extra incentive. The point is that you have to anticipate what customers you will truly attract.

For many fine dining restaurants, the reluctance to go there the first time is the expense. Frequently, potential new customers research these restaurants profusely (it’s a lot of money) if someone is going to stretch their budget. Restaurants that don’t offer food that is as good (in quality and quanitity) as it is at normal prices risk alienating new customers. Fine dining restaurants shouldn’t forget that this is a chance to prove that you are worth three digit checks. So if economy of scale doesn’t work for your restaurant week menu, it may be better until curiosity gets the better of customers who cringe at your prices.

Different Opportunities For Different Brands

Even famous restaurants sense the opportunity of restaurant week, but their motivations are not the same as most fine dining restaurants. In NYC, With Delmonico’s, Le Cirque and say the Russian Tea Room, just their name can invite curiosity. We all know how sitting in opulence drives people nuts. At Restaurant Week prices, I cannot imagine reservations for these restaurants lasting more than a few days. It’s true: everyone want to see how the other side are living, although many cannot afford to check it out on a normal basis. Along with the incentive of the enormous reduction in price, these restaurants are often mentioned when Restaurant Week is plugged in the press.

Yes, these restaurants must get many customers, if not most, who cannot afford to be regular customers. Yet, they also will get the soon-to-be wealthy, who may one day become regular customers. For restaurants that are less well known, a healthy evaluation of goals needs to be made beforehand. What customers do you want and how can you get them? You should consider price difference between the restaurant week menu and your normal menu. Can you give them the same kind of quality at that price?

The marketing realities are even more crucial. Ask why your restaurant? If you are the only Thai restaurant doing restaurant week, you may be getting many customers searching for “their” Thai restaurant. I’d consider not the person who comes into your restaurant for Restaurant Week, but what exactly is going to make them convince one of their friends to come at regular prices. This is a good way to test if you can stand out enough and won’t attract people only based on price, because the price won’t be around 48 weeks per year.

Particulars matter for Restaurant Week. Location, the make-up of the customers or the opinion (and awareness) of your brand are only some of the factors contribute to whether Restaurant Week will benefit your restaurant or just give you an expensive two week vacation away from the weaknesses you must address.