As restaurateurs nationwide search for ways to reduce costs in today’s inflationary environment, some are learning that a penny saved also can mean a few dollars lost when customers retaliate.
Some operators who’ve begun charging for items that used to be free or who are believed to have cut portions of food and beverages without reducing prices are raising the ire of cash-strapped patrons. They warn that could suppress traffic that’s already hard to come by and diminish good will.
Customer backlash prompted the Dallas-based La Madeleine chain to abandon a plan to charge 49 cents for two slices of the sourdough bread that traditionally was offered for free.
The 60-plus-unit bakery-cafe chain told the Dallas Morning News that it had received a “couple hundred complaints” when it instituted the charge in its home market to defray cost spikes.
La Madeleine could not be reached for comment, but its officials were quoted by the newspaper as saying that the bread costs about $1 million a year. There was no negative feedback from customers in other markets where the charge was put in place, they explained.
Customers also reacted when Pittsburgh-based Primanti Brothers began using a different flour in its pizza crust to offset rising wheat costs. According to the Miami Herald, peeved patrons at the 16-unit chain’s two Florida branches made their point, prompting a switch back to the original flour. But Primanti officials were quoted as saying their pizza sales had since risen about 10 percent despite a $2 hike in the price of a pie to cover the flour flip-flop.
Operators looking to pinch pennies at the bar also are meeting with customer wrath. Throughout the blogosphere patrons are venting about paying more for drinks ordered straight up instead of on the rocks. And the Wall Street Journal recently reported that several chains are now selling so-called pints of beer that are actually only 14 ounces, 2 ounces shy of a true pint, after switching to pint-style lookalike glasses called “falsies.”
Such moves are making customers more wary. Tim Barber of Bayway Isles, Fla., said he noticed during a recent stay at a hotel in Orlando, Fla., that a bartender pre-measured wine in a separate container before pouring it into a glass to serve it. “I’ve never seen this done before,” Barber said. “I think it is done so you drink more because you are really only getting a half a drink. It seems to be a totally structured process. Everything is measured to save money.”
Liz Jack of Beverly Farms, Mass., said that at approximately 30 different Dunkin’ Donuts she/has visited in the last month, she has had to ask each time for a package of sugar substitute for her coffee because it is now kept behind the counter.
Bloggers on AOL recently complained about restaurants serving smaller portions, reconstituting meats and tacking surcharges onto regular prices. Another blogger alleged that during a recent visit to Olive Garden the server limited the number of breadsticks to two after a refill of the basket was requested, not the additional five she and her companion usually received.
Mara Frazer, media relations manager for Olive Garden, a subsidiary of Orlando, Fla.-based Darden Restaurants Inc., denied that the chain was cutting back on its free offerings. “We still offer the same value to the consumer we always have, including the unlimited soup or salad and breadsticks with an entrée and all three as a stand-alone meal,” she said.
Marta R. Vandervlis of Largo, Fla., said she recently visited a nearby Red Lobster, another Darden subsidiary, and was shocked to hear from the server that her visit coincided with the last day for the Endless Soup & Salad promotion. That promotion offered guests a choice of soup, regular or Caesar salad with baby shrimp, and cheese biscuits for $6.95.
“I asked her why and the waitress hesitated,” she said. “So I said, ‘It’s killing the bottom line, isn’t it?’ and she just said yes in a very quiet nod.”
Red Lobster officials could not be reached by press time, but calls to several Red Lobster units in Florida confirmed that the promotion had been pulled.
Jennifer Bernhart of St. Petersburg, Fla., said whenever restaurants promote new and improved menu items, her first thought is, “Uh-oh, they’ve raised the prices again.”
According to Bernhart, “It seems that when they highlight any so-called improvement or fresh idea, they are trying to divert your attention from an increase in price somewhere else.”
Bob Andelman, an author in St. Petersburg, Fla., said he has noticed that servers at a branch of a major chain he frequents have stopped bringing out jellies with biscuits, even when requested. He said he also thought he noticed recently that portions at a local branch of an Italian dinnerhouse chain seemed smaller.
“I think, in the past, that the portions were too large” at that particular restaurant, he said. “We always wound up taking half home, which isn’t a bad thing, but shows they had room for reductions. So we actually thought it was long overdue.”
Lee Plotkin, a Dallas-based purchasing consultant specializing in smaller chains and independents, said most of his clients are making a conscious effort to avoid situations that could backfire, staying away from cost- or quality-reduction deals that could save millions at a time of extraordinary food inflation but might change the flavor profiles of the foods served.
“The perception is out there that if they make such changes, they will lose customers,” he said. “They also feel that if they can hold the line, they may well come out of this stronger and more operationally efficient and still have their customer base intact.”
Dahlander discovered that some regular customers weren’t visiting his fast-casual eateries as often as they had because they were tired of eating the same items. So he offered to refund their money if they tried a new item and didn’t like it. So far the offer has worked. He noted that sales this year are up 7 percent over 2007.
Referring to the cost-cutting techniques going on in the industry, he said he thinks the “tricks” end up harming business more than helping.
“When the guests see you skimping, they realize that you aren’t on their side, and that damages your reputation,” Dahlander said.
Nonetheless, Dahlander said he is going to add a 25-cent charge for corn-based biodegradable cups used to serve tap water. Although he long has given away free water in nonbiodegradable paper cups, the desire to be more environmentally friendly is prompting the change. He noted that the charge will help him break even on the cost of the cup and lid. The prices of drinks already served in biodegradable cups will not change.
“Like everyone else right now, we cannot afford to lose a single guest,” he said. “But I think this is one charge my guests will understand, and I will explain it to them verbally and in a written manner.”