Why Philly Restaurateurs Get Grouchy About Groupon

Bargain beef

“They’re feeding on the desperation of restaurateurs in a down economy,” says John Brandt-Lee, chef-owner of Avalon in West Chester, when asked about Groupon, OpenTable Spotlight, and the countless other coupon websites offering deals at Philly-area restaurants. “They suck. And you can quote me on that.”

The number of such sites has multiplied exponentially over the past year, based on the wild success of Groupon (which is so hot it turned down a $6 billion buyout offer from Google). Most operate on a variation of this formula: Diners pay $25 for a $50 gift certificate to the participating restaurant. There may be a time limit on how long the deal is available, or a certain number of people may have to buy in to activate the deal.

The benefit to diners seems obvious — twice the buying power for half the price!—and restaurateurs pull in customers who might not otherwise have come to the restaurant. But many restaurant owners aren’t fans.

“The deals get the seats full, but we’re not making any money on the tables,” Brandt-Lee explains. In exchange for sending an e-mail blast about a given restaurant’s deal, “OpenTable Spotlight takes $12.50, so we only get $12.50 for $50 worth of food. And they take away all of your rights to setting disclaimers” on dates and times. Brandt-Lee says the large cut that the sites take makes it difficult to maintain his standards, so he no longer participates. “Something has to give. Unfortunately, it ends up being the quality of food.”

And, possibly, the quality of the clientele. “The sites are all enticing, especially in July when it’s so quiet,” says Chris Mullins, manager of McGillins, who’s been approached by various dining-deal sites. “We’ve been here for 150 years — we’re not looking for a rush of 200 diners in one day. We look for the long term.”

Brandt-Lee puts it more tartly. “The sites promise diners, but they’re coupon-clippers, not diners. They don’t care about getting good food, they care about getting a deal.”

Both Mullins and Brandt-Lee do like and participate in deals with Restaurant.com, which allows restaurateurs to set whatever restrictions they’d like on the quantity and dates of the deals they offer. No money changes hands, but the site provides the businesses with e-mail addresses of the customers who buy deals to add to their own mailing lists.

One restaurateur who participated in an online dining deal for his new high-end restaurant (and didn’t wish to be named—even virtual coupon-clipping still has a stigma attached to it in some circles) had a different take. “It went better than expected. We thought it would be a cheap clientele, but they were decent, and there has been repeat business. The thing is, Groupon can’t make people want to go back. You have to do that with good product.”

  • john

    We dine out often – both casual and fine dining, and often at full price – but appreciate the opportunity these sites provide to do it for less on occasion. We use them at establishments we already frequent (and continue to) at full price, as well as to try others we might not necessarily visit. Stop your whinging because you can’t keep up with the competitions ability to turn this phenominom into new business!

  • john

    We dine out often – both casual and fine dining, and often at full price – but appreciate the opportunity these sites provide to do it for less on occasion. We use them at establishments we already frequent (and continue to) at full price, as well as to try others we might not necessarily visit. Stop your whinging because you can’t keep up with the competition’s ability to turn this phenominom into new business!

  • john

    We dine out often – both casual and fine dining, and often at full price – but appreciate the opportunity these sites provide to do it for less on occasion. We use them at establishments we already frequent (and continue to) at full price, as well as to try others we might not necessarily visit. Stop your whining because you can’t keep up with the competition’s ability to turn this phenominom into new business!

  • john

    We dine out often – both casual and fine dining, and often at full price – but appreciate the opportunity these sites provide to do it for less on occasion. We use them at establishments we already frequent (and continue to) at full price, as well as to try others we might not necessarily visit. Stop your whining because you can’t keep up with the competition’s ability to turn this phenominom into new business!