While visiting Nottingham we decided to go for a Chinese meal. Just down from our hotel was an restaurant called ‘Big Wok’, which looked enticing at £10 for all you could eat.
Now normally these ‘pile it high and sell it cheap’ establishments skimp on quality for the sake of price, but we were pleasantly surprised. For the nominal price you could go up several times with your plate to a buffet section in the middle of the restaurant to help yourself to a variety of well presented Chinese food. And that also included a ‘sweet’ section for afters.
So how did they make their money, being so cheap yet good quality? Well, they probably made a bit on the drinks, which were not included in the main price, and the place was absolutely buzzing, with all the tables occupied. We worked out that at least 200 people at £10 a head per weekday (and more at the weekends) would soon result in very respectable profits, certainly compared to other places that charged more but had less covers each night.
I had seen this phenomenon around the corner at a local restaurant chain which offered main courses for as little as £5, but then you knew they were making up for it on the drinks and other courses. They were also packed during prime hours, being a very popular haunt for taking the family out for Sunday lunch.
What’s the verdict on this? Can you afford to reduce your prices down during this economic downturn to get the punters in? If what you offer continues to be exceptional value, not tainted or reduced in quality to accommodate the cheaper prices, then you will maintain your status and keep your clientelle who will stand by and support you, and will still be there once everything starts to improve.
Both these businesses are working on their customers’ greed, understanding the state of their wallets, and providing a solution which is plentiful food at very good prices in convenient surroundings at suitable times.
Now – can your company adapt to this mind-set? Hmmm, not all of us are in such a position to accommodate this practice, but we can all be aware that offering a few good quality products at low prices can act as a lost-leader towards gaining more in up-selling or by increasing the ‘bums on seats’ capacity. Both seem to win in the end.