Will Groupon Ruin Your Restaurant?

March 05 2010 - 2:23 PM

The subject of Groupon restaurant deals is flying around Twitter. Ellen Malloy at the Restaurant Intelligence Agency has written an interesting piece on it as well. It reminds me of the ‘Check Please Effect’, when restaurants are overwhelmed by a newly-informed public and they aren’t prepared for the strain on their operations. Now imagine all of those people flooding in with 50% off coupons… that’s Groupon.

Is that a good or a bad thing? It’s not like you get blindsided by it. The ‘Check Please’ effect initially was kind of a surprise but you know exactly what the deal is with Groupon. I’ll use NAHA as the example here. They are a James Beard Award-winning restaurant. Carrie Nahabedian has been in institution in Chicago for many years. Is there any potential disadvantage to them participating in a Groupon?  Or is it an advantage?

The one thing across the board is that the redemption seems unrestricted by anything other than a time limit on ‘the deal’. Whether Inflatable Water Slide your restaurant is equipped to deal with 6000 people redeeming their 50% off Groupons in the span of one month… or two… or less? There seems like plenty of potential for blind-siding.

With Naha it may be too early to tell.

But with other restaurants giving it a shot like Volo and Karyn’s Cooked, to mention a couple, there may be no right or wrong answer. In any case if I can eat at NAHA for half off I’m in!