Free meals for kids is an old promotional concept, but when done well it can be a godsend for restaurants. The beauty of this promotion is that it drives behavioural change for customers, placing the restaurant in their consideration set whenever the promotion runs (every Tuesday as an example). A good example of this is the 23-store, Greek food restaurant chain Souvlakihut which claimed a 14 percent increase in dining revenue following the introduction of a ‘kids eat free’ promotion in early January.
Designed as a casual Greek restaurant, outlets offer take-away and eat-in services. In the past quarter, the dining-in component has risen from 26 per cent to 40 per cent of the revenue due to the ‘kids eat free’ promotion and the introduction of plates and cutlery.
The business reported that the promotion lifted revenue 32.5 per cent, based on figures for three weeks from January 4 when the promotion was running in Victoria. This figure was benchmarked against average sales figures from stores that were open in 2007.
Bill Fotiadis, who founded the franchise with his brother John in 2004 attributed the upturn to further differentiating the dining-in service from the takeaway service. Previous eat-in meals were served the same way as takeaway food but the franchise introduced plates and cutlery at the same time as the ‘kids eat free’ promotion.
“Feedback from customers on the introduction of plates and cutlery is that they feel like they are having a proper restaurant meal at a fraction of the cost,” said John Fotiadis. But lower pricing has also played a role. The menu has been revised to offer six meals under $6.
According to Bruno Ceraso, the franchise’s operations manager, research showed that restaurants offering meals costing more than $40 were finding it quite difficult. “Whereas what we are finding is quite a big increase in our dining. People can have that dining-out experience without the price tag attached to it.”
The value of the kids eat free promotion has been immeasurably good. Souvlakihut have taught their customer base to dine in their venue during off-peak times, positioning their business as a family friendly venue that provides great value food. It’s this point of difference that has generated sustained growth and the ability to expand.