Why not sale pricing at dying restaurants?

Stores keep having closeout sales. Restaurants keep closing, but they never seem to have sales. Why not?

Menu items could be more heavily discounted as the sale progressed: 10 percent off, 20 percent, 30 percent.

You could make hard choices: “The BLT isn’t worth it at 40 percent off. But when the discount hits 50, I’m all over it.”

At a pizza parlor, pepperoni would be only 10 percent off, because everyone orders it anyway, while anchovies and black olives would be 90 percent off from day one.

The problem is that if you went in to one of these places on the last day, all you could get is stale bread, pepper and relish.

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  • Dee

    The BLT is always worth it!! :0

  • Linda Biscardi

    Well Dave there are a number of reasons food is not discounted in restaurants.

    First of all what is served in restaurants needs to be cleaned, prepped and cooked before you serve it. Labor costs to do this are fixed costs unless you start serving pre-cooked frozen meals. Other overhead costs include not just what all businesses pay but significantly higher electric bills (refrigeration) and gas bills (cooking equipment).

    All restaurants have a closing ritual which includes cleaning and sanitizing the premises and adds another couple of hours to your payroll. You can see that a bookstore can discount their inventory, which was simply unpacked and put on a shelf and is not perishable, by 40% and still make a decent profit. A restaurant cannot because we are not only dealing with just the cost of food which is perishable, we are dealing with much higher operating costs.

    Now I do agree that there are some restaurants who are overpriced and should reevaluate their menu pricing structure because they will not survive these hard times if they don’t. But these places are probably less than 2 years old and would have failed anyway because they are overpriced.

    My suggestion to restaurant operators during these difficult times is scale back your menu to make sure that everything is as fresh as it should be. Pay attention to every plate that comes out of your kitchen. Staff cutbacks often make quality suffer. Pay extra attention to service and take good care of everyone who walks in your door. When restaurants get slow the food can suffer greatly and that is the biggest nail in any restaurant’s coffin.

    [Thanks, Linda. And naturally I wasn't entirely serious about a liquidation sale at restaurants, especially because of food spoilage issues -- although I do wonder what happens to all the unsold food? -- DA]

  • Ramona

    Most businesses, including restaurants, can see the end of their world coming long before the decision is made to close the doors. Rather than prolong the inevitable, I wish restaurants would pick a day for closing their doors, gather up the edibles, and donate them to a homeless shelter somewhere. Write-off, anyone?

    [That is one thing about restaurant closures from a customer standpoint: They're very abrupt. You only hear about them if you happen in on the last day and they mention it. They never say, "We're closing in two weeks." -- DA]

  • Linda Biscardi

    Hi Dave…I do realize your blog post was tongue in cheek but as I laid out restaurants do have a unique perspective and set of situations. I think most restaurants do not announce closings ahead of time because especially in a mom and pop operation…it is so devastating and you are always hoping things will turn around…even up until the last minute.

    Food that is not fresh has to be thrown out…that’s it…tossed in the trash can. That is why scaling back the number of items on a menu when things are slow everywhere makes so much sense. You and your customers are assured that everything you are serving them is fresh and you are less likely to be forced to throw your profits in the trash. These are times that require new thinking…one thing that never changes though is your food has to be worth the price the customer is paying you for it.

    There are health codes that will not allow you to donate food unfit to be served in your restaurant. It is a catch-22. Think about it…if it is not fit to be served should it be fit to give away? I am not commenting on the logic or illogic of that, just stating the Health Department’s stance on it.

    I remember back in the ’80s in the Reagan years I saw dumpster diving for the first time in my dumpster at La Piccoletta. I also never turned away anyone who came to my door looking for food…but I gave them the same food I served my customers.

    [Thanks for the amplification, Linda. -- DA]

  • Scott in R.C.

    Always good to have comments run two to three times longer than the actual story.

    BTW-Have you heard anything about King’s Fish possibly closing?

    Thanks!

    [Rex Gutierrez's blog mentions a "rumor" that King's is in trouble. Hope they make it; it's a quality place. It's at Victoria Gardens, for anyone curious. -- DA]

  • c warden

    Well Dave if you can imagine working your ass off, paying all your purveyors on a timely basis, not spending anywhere near extravagantly, watching every 5 and 10, and still seeing your future $100,000.00 in debt if you lock the door and throw away the key, you might be able to understand why there’s no discount (by the way, I haven’t taken a payroll check for 8 months and at the age of 56, I can’t do $100,00.00 in creditors). So you persevere, use your mojo and truly hope someone will love this place as much as I do, and buy it!