15th June 2012
A new voucher-free way of receiving offers and discounts at restaurants may seem like a great innovation for customers, but it is not good for the eating establishments themselves. The savings are automatically processed and deducted from American Express card payments when holders check into restaurants such as Cafe Rouge and Bella Italia on foursquare. Julie Hay, head of credit cards at American Express, said: "This partnership with foursquare is a first for our UK card members at a time when value-driven Brits are becoming increasingly tech savvy. It's a perfect way to get hassle-free discounts." It does seem to be taking advantage of new advances in technology, but it does not get away from the fact that discounts, whether they come in the form of vouchers or by checking in on foursquare, are bad for the restaurant business. With many households struggling to make ends meet during the economic downturn, voucher and discount schemes have become very popular. The number of websites offering them has increased exponentially, but the situation is one which is very difficult for the industry to return from. There is now a widespread mindset that people simply won't visit a restaurant unless they have an offer which is valid at the establishment. This means that restaurants are being forced to offer their food at a cut price and are therefore cutting their profit margins drastically. It may be good for customers in the short term, but it is not sustainable and many businesses will feel the consequences moving forward. Gone are the days when eating out was seen as a luxury reserved for special occasions, with cut price options customers are not eating out less, but spending less. As discounts transcend new technology, the restaurant industry should not be praising the new developments, but see it as the latest way to sell their services short.
