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Fine-dining restaurants drop prices, change menus

Tribune photo by JIM REED

Joao Aruajo serves beef to K.C. Craichy at the Boizao Steakhouse in Tampa. The bad economy has forced restaurants to steeply discount their food to attract customers.

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By MICHAEL SASSO | The Tampa Tribune

Published: May 8, 2009

TAMPA - Hoping to attract new customers, Timpano Chophouse & Martini Bar recently mailed thousands of people in the Tampa Bay area a coupon for a whopping $20 off.

At least people took full advantage of it. They ordered a $30 meal, pulled out the coupon and came away owing just $10, said the new general manager, Reece Youmans.

If too many customers do this, Timpano could regret it. For now, though, Youmans is positive about the coupon program and thinks it is attracting business.

Timpano is one of many fine-dining restaurants offering discounts as the always slow summer season approaches. But as the recession wears on, some restaurants are taking discounting to a whole new level, even offering 50 percent-off specials.

Some restaurateurs believe they do more harm than good.

For one thing, customers may begin to demand steep discounts before dining out. Another fear is the message deep discounting sends: If a restaurant offers half off a prime steak, was it overcharging all along?

"If you do it too much, your customers become dependent on it," said Bill Shumate, a co-owner of the more casual dining Bella's Italian Café in south Tampa. Shumate has started a cross-promotional discount between Bella's and his other south Tampa restaurant, Square One Burgers, but he admits he's not a discounting fan.

Around the country, restaurants are hurting because their business customers have pulled back on expense accounts and others are limiting their "aspirational" dining, a term for stretching the budget to enjoy a luxury meal.

Fine dining restaurants could see their sales fall 15 percent this year, compared with just a 2.5-percent drop in the broader restaurant industry, said Joe Pawlak, vice president of Technomic Inc. in Chicago.

In the more down-market casual dining industry, TGIFriday's has dropped the bar with a $5 meal deal for some sandwiches and salads. Fine dining places can't go that low, but they insist they are only breaking even on some of their recent specials.

Here are some of the restaurants offering significant discounts:

Boizao. This Brazilian steakhouse, or "churrascaria," has offered 50 percent discounts on certain occasions, such as Easter Sunday. To get it, customers must join the "E-Club" at www.boizao.com.

Splash! Most of its seafood entrees run $20 and up, but this north Tampa seafood house is offering a different "stimulus" package on each weeknight with prices as low as $5. On Tuesdays, it sells a shrimp taco and blue corn chip meal for $5, with purchase of a drink. On Thursdays, $10 will get you a sirloin steak dinner.

Malio's Prime Steakhouse. Malio's downtown is offering half-price steaks through May 31. The discount ends nightly at 7 p.m. because the restaurant needs to charge full price for private party customers, co-owner Jason Fernandez said.

Ruth's Chris, Shula's, The Palm, Gallagher's and most every high-end steakhouse chain are offering limited-time $36 to $45 prices for a multi-course steak or seafood dinner.

Discounting is a hotly debated topic within the fine dining world, with some restaurateurs mentioning their own almost apologetically.

Chris Muller, who studies chain restaurants as director of the University of Central Florida's Center for Multi-Unit Restaurant Management, said the high-end restaurant business is no different from the luxury goods business.

If a retailer normally sells a Gucci handbag for $190 and marks it down to $75, customers may begin to wonder, "Why was I buying it for $190 before?" Muller said.

After a restaurant offers steep discounts, it may take two or three years before customers are willing to shell out higher prices again, Muller said.

"It takes years to build up but only a few months to tear down a luxury brand."

A second fear is that customers may begin to expect discounts and only dine out when they find a cheap deal.

With that in mind, a few of the area's most established restaurants, including Bern's Steak House and the Columbia Restaurant aren't offering specials. Neither is Bellini, a high-end Italian restaurant in Dunedin.

But with the entire restaurant business down, and fine dining down even more, many restaurants believe they must offer discounts just to pay their costs.

Paulo Guimaraes, manager of Boizao, said he's had to cut everywhere he can while trying to bring in new customers with specials until the economy turns.

Some restaurants are trying creative strategies to capture new business without the deep discounting.

Splash, the Lutz seafood restaurant, has introduced new low-price menu items that it only offers one day a week.

The idea is to lure customers with specials while still charging full price for the regular menu. Some of the new customers may order pricier drinks, too, although the specials only require buying soft drinks, co-owner Tom Perkins said.

Shumate, the Bella's co-owner, said he tried a big discount in 2004, when no one else was offering them. He saw his sales surge 25 percent.

Not anymore, he said, with everyone doing it.

"You just don't get that reaction."

Reporter Michael Sasso can be reached at (813) 259-7865.

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