Quote:
Originally Posted by FlyingScot
These loss leaders only work for the restaurants when patrons buy a lot of other stuff, such as cocktails, to get a decent total $ margin. In a case where they're giving away the wine too, they end up with essentially nothing but happy customers. This is OK if those folks are going to come back soon at full price...
But what if they end up only attracting super price-sensitive customers, or training their customers to wait for a loss leader night? Then those people split as soon as they have to pay enough for the restaurant to make a profit. A tough business...
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Perhaps the most important factor overlooked when assessing why a restaurant will put a great value deal out there is the impact it has on the staff. Generating traffic on an otherwise expected to be slow night will generate gratuity for the front of the house. This is very important to keep valued employees earning income.
It’s an example of ownership/management, recognizing the risk of loss in order to protect employees. Much better than government imposed.