Despite the slow economy that is forcing consumers to tighten their purse strings, a Pizza Hut restaurant in southern Seoul is enjoying a busier lunch time these days, as customers are up by 20 percent. There is a secret to this success ― a new discount menu.
The franchise last month launched “smart lunch” items, allowing visitors to eat small-sized pizzas and pasta dishes for 6,000 won ($4.70).
“We introduced these items because we thought customers wanted a meal at a reasonable price during an economic downturn,” a Pizza Hut spokesman said.
The slumping economy is leading to cuts in prices at various dining franchises, better known as “family restaurants” here.
Restaurants are not directly discounting prices for fear of possibly damaging their image as a good place to eat out, but instead they have tweaked menus for customers to eat at lower prices.
Those who eat at Vips, one of the biggest domestic restaurant franchises, can have a steak by paying an additional 1,000 won at the salad bar.
From last month, another family restaurant chain, TGIF, has expanded a new set menu to dinnertime, so customers can enjoy side dishes for an extra 2,000 to 3,000 won on top of their regular fare.
All the perks are a product of tough economic times in the end, according to the business.
“I can’t tell the exact figure but customers have certainly declined in recent months, and things are not much different in other franchises,” an employee of a restaurant chain said on condition of anonymity.
Franchises say their strategy of going cheaper is inevitable these days and more of them are expected to come up with menus that cater to budget diners sooner or later.
“Spending on eating out is the first to suffer when the economy in bad shape,” said Kwon Hyung-jun, a manager at CJ Foodville that operates 87 Vips restaurants nationwide. “For now the best priority is to attract visitors, even with discounts.”
The current discount strategy also means that a “bubble” in prices is bursting, according to business experts.
“Prices are definitely inflated for quality in family restaurants,” a marketing researcher said. “They hike prices to make up for their marketing expense.”
Still, some restaurant chains are releasing “premium” menus with higher quality meals and higher prices.
“Many customers are turning to cheaper food items, but there are also customers who want to have meals of good quality even at higher prices,” said Wee Ki-jung, a marketing manager of Mr. Pizza. The franchise’s latest dish, a crabmeat pizza, is the most expensive of all its meals.
“We are not planning to go for a low-end policy,” Wee said.
Source: Korea Times
