Discount vouchers could harm pubs in long-term

Charging the full price for a meal out will become more difficult for restaurant and pub operators as diners become increasingly accustomed to discounts through money-off vouchers.

Market analyst Horizon warned that while money off vouchers had played a key role in keeping customers eating out over the past 18 months, their on-going use could threaten the brand position of chains and erode profit margins. Around 16% of diners now use vouchers when eating out.

"Consumers have developed a voucher-scheme mentality when it comes to eating out," warned Horizons' managing director Peter Backman. "It's a treadmill that many operators will find impossible to get off without redefining their target audience in line with lower prices."

Of the 16% who regularly use vouchers, most prefer two-for-one deals.

"Operators need to think about what discounting does to customer perception and the market position of their business," said speaker Glyn Heald, a partner at business coaching firm Shirlaws. "Foodservice businesses are based around four things — marketing, service, product and price. If the business lowers its price downwards then they are altering customer perception of their position in the market.

"Businesses intending to maintain that lower price point need to make sure they adjust their business model to maintain margins, and this means appealing to a different customer sector, altering service levels and their cost base and changing their marketing accordingly.

"If they stop discounting restaurants will have to work extremely hard to ensure customers get something extra for the higher price they are being asked to pay.

"Customers very quickly get used to paying a lower price for a particular level of service, so if operators effectively raise the price by stopping the discounts, customers could end up feeling cheated."