People Still Eat Out in a Recession

Applebee’s just opened their first restaurant in Saskatchewan, so last Sunday we decided to go there with some friends for supper. Once we got there we were informed there was a 45 minute wait, so we left and tried Eastside Mario’s which had a 40 minute wait. Now frankly I’m not ready to wait that long, I don’t have the patience, so we called Houston Pizza and they said they weren’t busy and there would be no wait. All three restaurants were in the same vicinity. I’ll admit that Applebee’s was probably busy because it’s new but Eastside Mario’s has been open for at least a couple years.

So why it is that two restaurants have people waiting to get a table, at a time when we’re supposed to be in a recession, while Houston Pizza have empty tables on a night that many people go out for dinner?

There are a few reasons and a few lessons business owners can learn from these two restaurants that have customers waiting to get in. One thing they have going for them is their success at branding, the other is having the advantage of being an international chain of restaurants. They have created a distinct environment that is different from your average family restaurant. They have well trained staff and systems in place so you will receive the same level of service in any of their restaurants. They have items on their menu that you don’t see at most family restaurants. Houston Pizza, on the other hand, doesn’t really offer anything different than you could get at any pizza restaurant in the city. It’s not that the food is bad, but it’s nothing special either.

What this tells me is that people are still spending money by going out for dinner but, when they do they want it to be more than just the same old, they want to experience something new. The restaurant industry is very competitive and the ones that will succeed will be those that serve quality meals with excellent service, and do it consistently. They will offer more than just a meal, they will create a dining experience that is fun and exciting.

If you read the March issue of the Entrepreneur’s Business Bulletin, you’ll know I just had my 60th birthday. Well, my wife surprised me by inviting some friends and family to have dinner at Golf’s restaurant, which is a place we go to only on special occasions. For the most part everything went fine, they let us use tickets we had bought for New Year’s which we hadn’t used because of a storm that night. Most people enjoyed their food and the service was ok.

Golf’s has been around for probably more than 30 years and will probably be around in the future. The thing I found though is that it doesn’t offer anything different or extra than you can find at most other high end restaurants in the city. They didn’t provide anything that would want me to pick them over one of the others. In fact a few things happened that would question us even going back.

For example, they wanted to charge $6.00 a plate for someone who couldn’t eat much and wanted to share something from her husband’s plate. Adding a 15% gratuity to everyone’s bill I thought was a bit presumptuous. I think its fine to tip but it should be up to me to decide how much, which is often dependent on the level of service.

The thing I out though is they didn’t do anything different to distinguish themselves from any other high end restaurant. When we went to the Cottage one year ago for our anniversary they gave us a complementary liqueur after our meal. It was one of the little things they did to make the evening special. This restaurant didn’t do anything to make it special. Don’t get me wrong I don’t like a lot of fan fair on my birthday, but this is one time they could have done something to make a positive impression, that would encourage others to go there when they’re celebrating a special occasion. There were about 16 people at our table and the table next to us was also celebrating a birthday and had about the same number of people. That’s 32 people that may not go back, but if they had done everything they could to make it special, perhaps we would want to go back.

If you do the math the average cost per meal is $40 x 32 that’s $1,200. If you consider the number of occasion’s people celebrate in a year you can begin to see the potential that could come from these 32 people. The added cost of any special offer would more than be offset by repeat business.

I would have tried to get everyone who came, to give their name and address with the date of their birthday and anniversary. I’d explain that there are special offers to help people celebrate and that they’d receive additional information. You might even mention that they’d receive a special gift on their birthday. I would do everything I could to get them back because after they’ve been there four times they’re more than likely to remain loyal customers.

The principles applied here can be applied to any business. It’s all about doing the little extras that make a difference. Those businesses that do will have a big advantage, because so few do.