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Discount vouchers have reshaped the eating-out market

05 May 2010 by

Discount promotions in restaurants and pub operators' value-led food offering have significantly changed the habits of UK consumers when eating out.

That's the conclusion from a new half-yearly report on leisure spending by corporate restructuring advisers Zolfo Cooper.

The Leisure Wallet Report found that the number of UK consumers who were more likely to visit a restaurant if it offered a price promotion had grown by 39% over the past six months.

Meanwhile the number of UK consumers who used vouchers more now than they did six months ago had risen by 30%. The figures came from a survey of almost 3,000 UK adults.

The report also revealed 39% of diners admitted that they were less likely to eat out now that they were six months ago, amid fears over job security, with only 12% claiming they were eating out more.

Ordinary pubs were the most popular place to eat out, with 67% of UK consumers having dined in one over the period, ahead of fast-food restaurants (49%) and pizza restaurants (32%). The average UK restaurant spend per head stands at just £16.02.

Speaking to Caterer, Zolfo Cooper partner Paul Hemming warned that although discount offers still pulled in the customers, restaurant operators needed to be cautious.

"If your offering is good enough then you don't need to discount," he said. "PizzaExpress can discount until the cows come home because their gross margin is 88% and they can still make lots of money on 2 for 1 offers. But if your gross margin is 70% and you start having to discount then you need to know exactly what you are doing if you don't want to be cut to shreds."

The report, which identified Harvester, PizzaExpress and Wetherspoon's as the top three preferred chain restaurants for a casual meal, served as a wake-up call to operators working on higher price points, according to Hemming.

"The pub food operator is defining the value benchmark. If you can't compete with those guys for what you are offering then you are going to struggle. And if you are offering something at a price point that is £10-£15, it is going to have to be something pretty special."

Website launches voucher search facility for local restaurants >>

Discount vouchers a hit with diners, says report >>

To discount or not to discount? >>

By Neil Gerrard

E-mail your comments to Neil Gerrard here.

Do you offer discount vouchers? Is the culture of discounting dangerous? Join the debate at Table Talk - Caterer's new networking forum. Go to www.caterersearch.com/tabletalk/forums/do-you-offer-restaurant-discount-vouchers-4398.aspx

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