Restaurant discounts: the habit they create

A pizzeria introduced half-price pizzas on Mondays three years ago, to fill a quiet night. It worked: Mondays are now its busiest night of the week. But Tuesdays and Wednesdays have grown quieter, many regulars only come on Mondays, and when the owner suggests ending the offer, the team warns that guests will be furious. A promotion that was meant to fill one night has become the restaurant's real price. That is the habit restaurant discounts create.

Discounts are not wrong. Used briefly, with a clear purpose, they can fill a quiet night or launch something new. The trouble starts when a discount becomes permanent. Guests learn the discounted price, plan around it and come to see the full price as expensive. The venue gives away margin on visits that would have happened anyway, and finds it very hard to stop.

This guide covers what a standing discount teaches guests, the sums behind it, how to withdraw one without losing the guests it brought and the three kinds of discount that are worth keeping. Every venue and figure in it is an example.

A discount lowers the price of something for a time, to encourage guests to buy. In general business, discounts and allowances come in many forms, from money off to volume deals. In a restaurant, the common ones are a percentage off the bill, a cheaper night, two for one and deals through discount websites.

In the short term, discounts usually bring guests. In the long term, they teach guests something about the venue's prices. Whether that lesson helps or harms depends on how long the discount runs, who uses it and what it replaces.

A standing discount, one that runs every week without an end date, creates a habit. Guests learn that Monday is half-price night, and they plan around it. Some come only on Mondays. Some who used to come on Fridays move to Mondays. Some new guests never see the full price at all.

Over time, the discounted price becomes the price guests expect. The full price, on other nights, starts to look expensive by comparison. The venue has, in effect, lowered its prices for a large part of its trade without deciding to.

The question of discounts or rewards is really a question about habits. A discount teaches guests to come when the price is lower. A reward teaches them to come back because they are valued. The first builds price-sensitive guests; the second builds loyal ones.

For most venues, rewards, recognition and things added, such as an event or a set menu, build better habits than standing discounts. Our guide to discounts or rewards: which habit are you building? covers the difference in detail.

Discounts attract two kinds of guest. Some are new guests who try the venue because of the price, and some of them return at full price. Others are guests who would have come anyway, now paying less. A third group, bargain hunters, come for the discount and leave when it ends or when somewhere else offers a better one.

The balance between these groups decides whether a discount pays. If most of its guests are new and many return at full price, it may be worth it. If most are regulars paying less for the visit they would have made anyway, it is a cost dressed as a promotion.

Before running any discount, do the offer margin sum. Work out how much margin the discount gives away on each cover, multiply by the covers that will use it, and compare that with the margin from the extra covers it brings, the ones that would not otherwise have come.

The sum is often sobering. A half-price night that brings sixty covers, of which twenty are genuinely extra, gives away half the margin on all sixty to win twenty. Whether that pays depends on the numbers, and the only way to know is to work them out. Our guide to offer margin: the sum to do before you publish covers it step by step.

Guests remember prices, and they compare. The price a guest expects to pay, sometimes called the reference price, is shaped by what they have paid before. A guest who has eaten a pizza for six pounds on a Monday will find twelve pounds on a Friday harder to accept.

That is why frequent discounts are so hard to undo. They do not just lower the price on the discounted night; they lower what guests think the food is worth on every night.

A discount on a quiet night often moves guests rather than adding them. Some guests who would have come on Thursday at full price come on Monday instead, at half price. The Monday looks busier, but the week's total covers barely change, and the week's margin falls.

Look at the whole week, not just the discounted night. If Monday rose and the rest of the week fell by a similar amount, the discount mostly moved guests around. Only the covers that were genuinely added are a gain.

Many promotions fill tables without cutting the price. A set menu at a fixed price, a tasting evening, a guest chef, a supper club, a wine dinner or a themed night gives guests a reason to come without lowering the price of anything on the regular menu.

These promotions are new products, not cheaper versions of old ones, so they do not train guests to wait for a lower price. Our guide to promotions that fill the right seats and our list of fifteen restaurant promotion ideas that are not 2 for 1 cover the alternatives.

Ending a standing discount feels like a price rise to the guests who use it, and in a sense it is. Regulars who have come every Monday for two years may feel the venue is taking something away. Some will complain; some will stop coming.

That is why the best time to stop a discount is before it becomes standing: give every discount an end date from the start. When a discount has already become a habit, stopping it needs care and a plan.

Withdrawing a standing discount works best in a few steps. Decide the end date, a few weeks ahead. Decide what will replace it, so guests are not simply losing something. Tell guests clearly and early, explaining why. Protect your regulars with a gesture of thanks. And then stick to the date.

Do not let it drag on. A discount that is "ending soon" for months loses credibility, and guests learn that end dates mean nothing. A clear, well-explained end, with something better in its place, is usually accepted by most guests.

The most effective way to withdraw a discount is to replace it with something guests value more. A half-price Monday might become a Monday supper club with a set menu at a fair price, a different theme each month and a reason to book ahead. A discount for regulars might become a regulars' evening with a taste of the new menu.

The replacement should give guests a reason to keep coming on that night, without lowering the price of the regular menu. Many guests who came for the discount stay for the replacement, especially if it is genuinely good.

Tell guests plainly and kindly. "From the start of next month, our Monday half-price pizza is ending. We have loved filling the room on Mondays with you, and we are replacing it with a Monday supper club, with a set menu each week. We hope to see you there." That is honest, warm and points to what comes next.

Tell them in the venue, in an email to guests who opted in and on the website. Make sure staff know how to explain the change, because regulars will ask. A team that can explain the reason calmly turns a potential complaint into a conversation.

Some venues withdraw a discount gradually: half price becomes thirty per cent off, then twenty, then nothing. It can soften the change, but it also prolongs it, and guests notice each step as a small loss.

A clean end with a good replacement is usually better than a slow fade. If you do withdraw gradually, set the whole schedule in advance and tell guests, so each step is expected rather than a surprise.

Venues that have relied on discounts often find a menu price increase harder to put through. Guests used to paying less react more strongly to higher prices, and the gap between the discounted price and the new full price grows wider.

If you are planning both, a price increase and the end of a discount, consider their timing carefully. Doing both at once may feel like a double blow. Our guide to how to put a menu price increase through quietly covers how to raise prices without losing guests.

Not every discount is a bad habit. Some are worth keeping, because they serve a clear purpose, reach a defined group and do not lower the price of the regular menu for everyone. For most restaurants, three kinds stand out.

They have something in common: each is limited, each is easy to explain and each builds a relationship rather than simply moving guests from one night to another.

A discount for your own staff, on their days off or for their meals, is usually worth keeping. It helps the team know the menu as guests do, makes the venue a place they want to bring friends and family, and is a small, valued benefit.

Keep it clear and fair: who qualifies, how much and when. Record it like any other discount, so its cost is known. A team discount that grows informally, extended to friends of friends, stops being a benefit and becomes a leak.

A set price for a specific quiet slot, such as an early supper before the theatre or a weekday lunch menu, is less a discount than a product. Guests get two or three courses at a fixed price, at a time the venue wants to fill, and the regular menu keeps its price.

Because it is limited to a slot and to a set of dishes, it does not lower the reference price of the main menu. Many venues run early-evening or lunchtime set menus for years without creating the habit a standing discount does.

A modest discount for a defined group you want to build a relationship with can be worth keeping: neighbours on a particular night, staff of a nearby hospital or office, or a local community you serve. It says the venue values that group, and it brings guests who are close by and likely to return.

Keep it limited and specific, with clear terms, and review it each year. A discount for a defined group, used by people who would not otherwise come, builds loyalty. One that is available to anyone who asks is just a standing discount by another name.

Some discounts are never announced: a server knocking a little off for a friend, a manager rounding the bill down, drinks for staff's friends at cost. Each seems small, but together they can cost more than any promotion, and they teach the guests who receive them to expect it.

Set a clear policy for what staff may give and why, such as a gesture to put right a mistake, and record every one. Generosity is part of hospitality, but it should be a choice the venue makes, not a habit that grows unseen.

Discount websites and apps can fill tables quickly, but they often take a commission on top of the discount, and the guests they bring tend to move on to the next deal. The real cost of each cover can be far higher than the headline discount.

If you use them, use them briefly and for a specific purpose, such as a launch or a genuinely empty period, and measure how many of their guests return at full price. Most venues find the answer is very few.

To see whether a discount has created a habit, watch a few figures. What share of covers now come on the discounted night? Are regulars visiting only on that night? Have full-price covers on other nights fallen since the discount started? Do new guests from the discount ever return at full price?

If the discounted night keeps growing while the rest of the week shrinks, the habit has formed. That is the moment to plan a withdrawal, before it grows further.

In a group, a discount at one venue can affect the others. Guests may move from a sister venue to the one with the discount, or come to expect discounts across the group. A discount that fills one venue's Monday may empty another's.

Agree discount policy across the group: which discounts are allowed, where and for how long. Measure their effect across all venues, not just the one running the offer.

Some venues offer a discount for booking early, such as a lower price for tables booked a month ahead. It can help fill the diary, but it rewards guests who would have booked anyway, and it can make guests who book later feel they are paying a penalty.

If the aim is to secure bookings ahead, other approaches often work better: early access to a popular night, the best tables for those who book first or a small extra for early bookers, such as a welcome drink, rather than money off the bill.

Discount nights are often the busiest of the week, at the lowest margin. The kitchen works hardest for the least money, and quality can suffer when a team is stretched by covers that bring little profit. A team that feels the discount night is chaotic and unrewarding may start to treat it that way.

Look at what a discount night asks of the team as well as what it brings in. If the kitchen and floor are working flat out for guests who would have come anyway, the discount is costing more than its margin: it is costing the team's energy and the quality of the food.

An invented pizzeria has run half-price pizzas on Mondays for three years. Mondays are full, but the rest of the week has grown quieter, and the owner's sums show that most Monday guests are regulars who would have come on another night at full price. The pizzeria decides to end the offer.

It announces the end six weeks ahead, replaces it with a Monday supper club with a set menu at a fair price and a different theme each month, and thanks its Monday regulars with a dessert on their next visit. Monday covers fall at first, then recover as the supper club finds its guests. Tuesday to Thursday covers rise, and the week's margin is higher than before.

servearound's till has no discount function today: there is no percentage or amount off a bill to apply, so a standing discount, if you run one, is handled outside servearound. A gesture is recorded on the till as a comp, on one dish or a whole check, with an optional reason, and payment analytics show voids and comps by member of staff, so informal giveaways are visible each week.

A set price for a quiet slot can be built on the menu as a set menu, and with Campaigns, an invitation to it goes only to guests who opted in, chosen by tier, visits or how recently they came. Reservation analytics show covers by day and hour, with each headline figure against the period before, and the menu report shows units sold and revenue for every dish over any dates, which is the evidence for whether ending a discount cost covers. See Analytics and Campaigns.

Not always. Brief, targeted discounts can work. Standing discounts tend to become the price.

Guests learn the discounted price and plan around it, so full prices start to look expensive.

Do the offer margin sum: margin given away on every cover that used it, against margin from the genuinely extra covers.

Set an end date weeks ahead, replace it with something better, tell guests clearly and thank your regulars.

A clean end with a good replacement is usually better than a slow fade.

A staff discount, a set price for a quiet slot and a modest discount for a defined group you want to build.

They fill tables, but often at a high cost, and few of their guests return at full price.

Watch whether the discounted night grows while the rest of the week shrinks, and whether regulars only come on that night.

Restaurant discounts create habits. A standing discount teaches guests that the discounted price is the real one, moves them from full-price nights to cheaper ones and makes the full price look expensive. Do the offer margin sum before any discount, give every discount an end date and judge it by the whole week, not the busy night it creates.

When a discount has become a habit, withdraw it with a plan: a clear end date, something better in its place, honest communication and thanks for your regulars. Keep only the discounts that serve a clear purpose: the team's own discount, a set price for a quiet slot and a modest discount for a group you want to build. Everything else is usually better replaced by promotions that add something rather than cut the price.