Why Are You Losing Money During Restaurant Week?

Restaurant week is one of the most exciting times of the year for local foodies, but sometimes it isn’t the most exciting time of the year for restaurants. Restaurant week’s high advertising costs and deep price-slashing can make it tough for restaurants to succeed during such a competitive time, and if your restaurant is feeling the strain of cutting your margins too thin without a reasonable return, you might be thinking that it’s about time to call it quits between you and that darn restaurant week. Here are some common restaurant week problems, with advice for fixing them, as well as ways to tell when you should just skip restaurant week altogether. 

Problem #1: The Pricing is Tough

The most common problem that restaurants have with restaurant week is that they can’t get the pricing to work out. Perhaps your prices are already low, and people don’t see why they should spend $33 at your restaurant during restaurant week when they could spend a similar amount any other week of the year for the same menu items. If this is the case for you, you might want to consider just offering the $22 lunch menu to draw in weekday employees.

Skip restaurant week when $22 is similar to your regular lunch or dinner pricing, or makes for ridiculously large portion sizes. If either of these are the case, you might want to find other advertising options for your restaurant. 

Problem #2: Your Restaurant Isn’t Trendy

Another really common problem that restaurants have is that their restaurant doesn’t quite meet the trendy requirements of restaurant week. If the hallmarks of your restaurant are its comfortable decor and your down-home cooking, you probably aren’t going to get the same amount of business as the sleek-looking formal places. Remember though that restaurant week was built for the locals to discover new restaurants near them, so that $22 lunch offering might work, or an extra-special, extra-large portion $33 dinner offering including a fun drink might be the ticket to your restaurant week success.

Skip restaurant week when your restaurant just doesn’t have enough tables to hold a large crowd. If your restaurant serves up comfort food and comfortable seating, your guests will slow the pace of their dinner to match their surroundings and your turnaround will be too slow for you to recoup your losses. 

Problem #3: Your Restaurant is BYOB

If you have a BYOB, your restaurant might actually be losing money during restaurant week. One of the easiest ways to make money during this event is by upselling your beverages list, but if all you have is soda, you’re probably not going to make enough money to break even. You may still be able to make this work with some creative thinking. If you’re a kid-friendly establishment, fill the kids’ menu with exciting non-alcoholic cocktails (that don’t have free refills) and offer a kids’ restaurant week prix fixe for $3.30 per child to get families into the restaurant. If you’re known as a karaoke hotspot, create an exclusive restaurant week karaoke contest with an entry fee and a free dinner for two as a prize.

Skip restaurant week when you have a small menu because your restaurant is more of a hangout spot. If your menu is selective in the first place, you’re not going to be able to convince potential customers or your regulars that restaurant week is enough of a deal for them to bother. 

The most important thing to do, whether your business model is based on affordability, comfort or laid-back BYOB atmosphere (or all of these things) is to make sure that your restaurant stays true to your ideals during restaurant week. If you create a false menu deal to try to lure customers in, or if you pretend to be a restaurant that you’re not just to make some extra cash, you’ll risk losing your regulars’ support, as well as your own integrity. Don’t take that risk, just seek other marketing options instead.

Photo licensed by  Mr. T in DC