More On Discounting and Its Effects

Recently, we had an editorial discussing the pros and cons of long-term discounting…..does it add needed sales and profits? versus does it dilute the brand? and, therefore, is actually destructive when used over time? Yesterday, The Huffington Post ran an article on T.G.I.Friday’s new launch of an “Endless Appetizers” promotion and, at least one analyst is not hopeful about what the promotion may bring to the chain.

“In the short term, [Fridays] will definitely have more traffic, but in the long term it damages their plan and will really destroy them,” said Aaron Allen, founder of Aaron Allen & Associates, a restaurant industry consulting firm was quoted telling the Huffington Post. “It’s the signal of a desperate brand.”

We still believe the bottom line is that a short-term discount can, indeed, stimulate sales to occur, but the problem is that many – both restaurants and tabletop manufacturers  – get “hooked” on these discounts and, in the long-term, this practice of relying on discounts for products that were not intended to be continually discounted is unsustainable and very destructive for the reasons we expressed in our editorial. We’ll watch the T.G.I.Friday’s promotion and see what happens. 

To read the entire Huffington Post article go here:
http://www.huffingtonpost.com/2014/07/09/tgi-fridays-appetizers_n_5570314.html

To read our editorial on long-term discounting and its effects, go here: 
http://www.tabletopjournal.com/journal-page/discounting-as-a-way-of-life-getting-sales-profits-or-diluting-your-brand