Back in 1992, when the late restaurateur Joe Baum and I dreamed up what we called Restaurant Week, we had no idea that it would become a national and international institution. The original four-day event was created as a goodwill gesture to the 15,000 reporters coming to cover that year's Democratic National Convention. Frankly, we thought it would be a short-term money loser but have long-term PR benefit for New York and the restaurant industry. Now, almost 20 years later, restaurant weeks have become a tradition in city after city because they appeal to both customers and restaurants. In short: they are a win-win.
Customers love them because they offer a chance to experience many of their city's best restaurants for a modest price. The restaurants gain by attracting thousands of new diners, principally younger people and retirees who might hesitate to try such restaurants without the assurance of an affordable bill. Restaurant Weeks have become Restaurant Months—and then some. For example, New York City's Restaurant Week has stretched to two weeks in January and two weeks in July (i.e. times when seats are hard to fill).
For a number of years now, that seemed to be all there was to know about Restaurant Week. However, this year over 170 of the 260 places participating in NYC's summer Restaurant Week have extended their bargain-priced menus through Labor Day. Why, you might ask? Is it because the restaurant industry is in a slump? Or has Restaurant Week proven so successful that the industry wants it to go on year-long? I would answer both questions with an emphatic "yes."
There's little doubt that many restaurants are struggling in the aftermath of the recession. We know from surveying hundreds of thousands of customers that they are eating out less and generally being far more price-sensitive in choosing where and what to eat. They're also cutting back on things like appetizers, desserts, and alcohol: those fancy bottles of wine sold at juicy markups are largely things of the past. All this amounts to an erosion of revenues and profits.
On the other hand, bargain prix fixe menus are always a lure for customers, especially now. They mean you can walk in and out of a restaurant with dignity, at a price that you know in advance is acceptable. Of course, once in the door, patrons very often go à la carte, add an extra dessert, or celebrate by buying wine with their meal. The amount actually spent is thus usually far more than the prix fixe price, especially since drinks, coffee, and tip are all extra.
So why don't all restaurants offer affordable prix fixe menus year-round? The reason, at least on an individual basis, is that no restaurant wants to look like it's discounting—i.e. having problems. The Restaurant Week program eliminates this issue, by putting all restaurants into the same boat and then smartly growing business through advertising and the help of sponsors such as American Express and Coca-Cola. It's a model Joe Baum and I didn't even know to dream of when we dreamed up the idea—but one he'd be as delighted as I am to see fly so high and so far for so many years.
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