The use of discount vouchers in restaurants has halved since their popularity peak two years ago, research claims. This is due to a combination of restaurants selling too many items at a loss and consumers losing interest due to an overload of choice.

Restaurants have become much more discriminating in the use of vouchers to attract price-conscious customers. Peter Backman of data collection company Horizons says that “Until 2012, there was a distinct pattern in the issuing of discount vouchers – there would be more in January, when no one went out or shopped after Christmas, then a lull, followed by a rise in the summer and another falling off in the autumn”. However, the same trend can’t be said of last year where no distinct variation occurred in voucher offers from season to season. The year was described as being ‘flat’ when it came to vouchers being issued, with the total being 50% lower than in the peak years.

Research also suggests that the overwhelming choice of vouchers played a role in the decline. Once upon a time, middle-class shoppers rushed to join the craze to print off vouchers or use online codes to bag a deal on restaurant meals, some refusing to eat out if they had to pay full price. But as more and more restaurants got on board with the trend, consumers begun to be bombarded with countless daily deals in their inboxes. People gave up looking at vouchers before finding one they would want to use, resulting in a further decline of voucher usage.

Why are the restaurant vouchers in decline?

Primarily, many restaurants have not been able to sustain deals that they have promoted such as ‘all you can eat’ and ‘2-for-1’. The companies making these offers were often losing money on them. A study led by technology provider Omnico Group found that only 16% of hospitality businesses believe vouchers are important in generating sales during 2014, and 18% never use vouchers at all.

Andrew Guy, CEO of Ed’s Diner explained during an interview that vouchers were a dangerous habit to slip in to. ‘The experience of those restaurants that have used vouchers a lot is that it’s a habit you can’t get out of. If a substantial proportion of your customers come to you because they got a voucher, which they can get hold of very easily, when you cut off the vouchers your number of customers drop, because you’ve represented yourself as a business with a substantial proportion of customers that only come when they get a voucher, resulting in a permanent discount of your products.’

Businesses are now focused on finding alternative ways to attract customers on a budget, fill restaurants in quiet periods and boost profits. During Omnico Group’s study it emerged that restaurateurs consider tracking feedback and social media as much more important marketing activities to voucher promotion, enhancing long-term loyalty with customers. The study showed that half of British consumers would be more likely to return to a venue if it had loyalty cards, however, businesses are not so keen on using the scheme to drive sales, with just 36% of restaurateurs choosing it as their preferred marketing technique.

This is a surprising statistic, considering the evidence that loyalty schemes can turn visitors into repeat customers, whereas discount diners are rarely seen again. Loyalty cards also provide the opportunity to capture data on customers, such as age, average spend and customer type. This information can then be used to run marketing automation campaigns, where more relevant offers can be emailed that match the profile of each customer. Matthew Cox from the hospitality division at Omnico Group says that ‘Having an effective system in place to provide customers with personalised vouchers tailored to their needs will ensure loyalty in a crowded market and track their behaviour.’

In this case, it seems that loyalty schemes offer the perfect middle ground, enabling restaurants to offer sustainable offers less frequently throughout the year, whilst encouraging customers to keep coming back.






Food Alert