Restaurant Owners Say Sites Like Groupon and Yelp are Bad for Business

We’ve known for some time now that restaurants are one business that stands to lose the most from running a daily deals campaign. They operate under very tight profit margins so a bad campaign can cause a restaurant some serious financial damage.

Apparently, according to a recent poll of restaurant owners in the US, Yelp and Groupon were in an almost dead heat when it comes to being the most damaging to these types of businesses. In contrast the majority of restaurants polled believed that sites like Twitter and Facebook were actually good for business.

The poll which was conducted by Tundra Specialties, a national distributor of restaurant supplies and equipment, surveyed their customers over a one month period of time to get a better understanding of how restaurant owners felt the web was influencing their business.

The poll showed that there were four groups of websites that had a major impact on the food service industry. These included daily deals sites like Groupon, customer review sites like Yelp, online reservation sites such as OpenTable and the social networking sites like Twitter, Facebook and FourSquare.

But the most significant finding was probably about what sites were the most damaging to the restaurant business. 43 percent of restaurant owners polled said that Yelp, the restaurant review site was a problem because it basically gives customers carte blanche to say whatever they want about a restaurant and a lot of the reviews can be very damaging.

Groupon got 41 percent of the vote for being the most detrimental to the industry. Experts said that the deep discounting made popular by Groupon along with “stingy customers” is far more damaging.

“The ultimate harm is the culmination of all of these group buying coupon programs and restaurants participating in them feed the addiction of coupon clippers, who hop from one restaurant to another,” says Joel Cohen of RestaurantMarketing.com, a leading consulting website for the food service industry. “I’ve definitely heard more horror stories than success stories.”

Cohen went on to add that the numbers show that restaurant owners are aware that this aspect of the industry is still in flux and as new platforms become available they’ll be willing to try them to find what works and what doesn’t.

Source: PRWeb