It’s no secret that restaurant owners have been feeling the pinch recently. In 2017, The Telegraph reported that restaurants were offering more discounts to attract diners and mitigate the increasing costs of running an establishment. With so much competition from other eateries, restaurants need to offer something extra to entice customers in, and that often comes in the form of a discount code, voucher or other special offer.
But is this a good strategy? Timing is everything when it comes to offering discounts, and cash flow must be taken into consideration. Changes in food prices, business rates and other bills can all have a large impact on a restaurant’s cash flow. In October, buying specialist Lynx Purchasing highlighted the rising prices of popular Christmas food and the problems this could cause for hospitality and catering operators. Many establishments increased their Christmas menu prices to take the higher costs into account. Businesses offering low prices during this time could face an unnecessary loss, especially as customer demand is naturally high in their favour.
However, discounts can work very well to increase the number of customers coming to eat, if they are offered at the right time. By offering discounts on a return visit in the quieter period during the new year, restaurants could increase their footfall. While families venture out for occasions such as Mother’s Day and Easter, restaurants tend to be a little quieter before then, particularly in January. So as well as thinking about the effects that high costs can have on a business in peak season, caterers need to consider slower periods when consumers spend less, and keep tight hold of their purse strings all year round. Carefully planning discounts to increase custom and keep a healthy cash flow, can help to plug the gap at the beginning of the year and during other quiet periods.
Spreading Costs Elsewhere
It is important for restaurants and other hospitality operators to take the pressure off in areas where they can. With so many overheads, poor cash flow can be fatal for a struggling pub or restaurant. However, asset finance can help to spread the cost of essential equipment, so that caterers can manage their finances effectively even while feeling the pinch from suppliers.
At Arkle Finance we can provide catering equipment finance for your restaurant, bar, café or takeaway – including ovens, fryers, grills, microwaves, refrigerators, coffee machines, furniture, servery area fit-outs, and more. Asset finance can help you to secure your equipment in a more affordable way, so that you can worry about finances less and focus on running your business a little more. Call 01933 304789 or contact us using the form on the right to find out more.