If on too long, discounts no longer feel like discounts. They’re just the new prices.

The Eat Out to Help Out Scheme was wonderful to be a part of. We were so grateful to see confidence build throughout August and were incredibly energised by people coming out to support the hospitality industry, even while everyone is feeling the pinch. 

Some restaurants are continuing the scheme on their own dime, which is understandable, but it makes me nervous. Discount culture is tricky. While it’s a fantastic way to catch attention and bring new people in who might otherwise have not noticed you before, it sends a message that your product can be cheapened. The carefully calculated prices on the menu don’t really mean anything once you start slashing them in half, and it starts to normalise prices that stop the business being able to meet their costs, let alone make any profit. 

Many don’t realise how hospitality businesses price their products, often discussing around the table the ‘huge mark up’ on food and drink while they’re checking out the menu. I attended a wine course once and was surprised when I heard the instructor telling the old favourite price comparison story; how the same bottle of wine could be found in a shop for a third of the price than in the restaurant next door; implying that the restaurant was effectively cheating its customers. 

I couldn’t help myself. I explained that when you go out, you’re not just paying for the bottle you order. You’re paying for the rent and bills of the restaurant, the bartenders' and serving staff's wages, the napkins that have been freshly laundered, the glasses that are bought, cleaned and polished by someone before you drink from them, the cleaning team that comes in on the night shift after you’ve left. If the restaurant sells enough of those bottles; only then might they make a small amount of profit once their extremely high costs are met. 

Many of us in the industry are having to tell crestfallen staff that their hours are going to be reduced, or worse, that they may not have a job at all. Rent and utilities still need to be paid and contracts with suppliers still stand. Our chain of suppliers are scrabbling with reduced supply and changing demand which effects food prices. Times are hard enough. Big businesses with huge followings online can promote a discount that triggers a big enough response to mitigate the loss with sheer volume of customers. But smaller, local businesses might struggle to raise enough awareness of their promotion so will end up just losing money. The main issue is that discounts are only effective when you feel like you're lucky to get it. If they go on too long, discounts no longer feel like discounts; they’re just the new prices. 

I totally respect the decision of any business to continue to take advantage of this amazing national campaign, and really hope they’re able to benefit from it. Kindred has decided not to. The hospitality industry has had a huge amount of support during this crisis but a time is coming when we’ll be on our own again. We need to take pride in the quality of the experience we’re offering to our customers and be confident that our prices are the right prices if we’re going to stand strong in the trials to come.