Donna Hood Crecca is a Senior Director at Technomic, Inc. and offers suggestions on how to build your happy hour and late night business.
Creating incremental drink sales during untapped day parts is a tactic many restaurant operators recognize as a way to build their businesses. To do so successfully requires an understanding of what consumers are seeking during these day parts. It is important to note that any happy hour or late night program must be in compliance with local and state regulations, so your first step is to understand what’s permitted and what’s prohibited in terms of adult beverage pricing and promotions during these time periods.
Happy hour and late night programs can increase overall traffic and sales for a restaurant, especially if the food and drink program or special offer is engineered with the guest in mind. Consider the following when developing your program:
While special pricing on drinks and food is often a draw, it’s not the only thing consumers seek. For instance, price considerations did rank high on the list among consumers surveyed; 46 percent said they were drawn by good prices on drinks, and almost as many (41percent) said value-priced food was an attraction. One quarter (26 percent) pointed out that happy hour is a lower-priced alternative to a dinner out at a restaurant, although almost as many (24 perecent) said they appreciated the chance to stay on for dinner. But happy hours are about more than low-priced drinks, as many patrons see these occasions as a way to relax (43 percent), to meet up with friends (38 percent) or to connect with their colleagues outside of the workplace (23 percent).
Food and beverage offerings at happy hour should support the restaurant’s concept and culinary position. As an example, P.F. Chang’s China Bistro’s Triple Happiness Happy Hours features nibbles such as Tuna Tataki Crisp and lower-priced signature cocktails. El Torito offers a happy hour in the Cantina with margaritas, domestic draft beers, well drinks and wine at special prices, along with foods such as beef taquitos rancheros, nachos and quesadillas. At Kimpton hotel properties, the Hosted Wine Hour carries on founder Bill Kimpton’s tradition of greeting guests at the door with a glass of wine at the end of the day. Today, the program features light bites and Wines that Care, vintages from earth-friendly producers.
Late night is an opportunity to attract younger consumers. More than half of consumers under the age of 35 make late-night restaurant visits several times a month, as compared to just a quarter of consumers over 35. Also, one-third of 18- to 34-year-olds agree that they would visit restaurants late more often if these locations stayed open later, compared to just 16 percent of consumers aged 35 and older. In addition, late-night specials on adult beverages are of far more interest to younger consumers than to older patrons: 41 percent of consumers aged 21-34 say that such specials are very important to their decision regarding whether to visit a late-night restaurant, versus just 27 percent of those aged 35 and up. Tapping that opportunity, Applebee’s launched a late night program last summer. Known as Club Bee’s, the initiative encourages franchisees to stay open after 9 p.m. and offer appetizer and drink specials (where legal) and engage local events/entertainment like DJs, etc.
Happy hour and late night can generate up to one-third of adult beverage sales, but the beverage sales can differ between the two day parts. As data from Restaurant Sciences’ transaction metrics demonstrates, beer dominates both occasions. Wine accounts for a third of happy hour sales, but declines to one-fifth of sales at the late night day part when spirits sales rise.
While happy hour and late night programs can both generate additional traffic and revenues for restaurants, understanding the consumers’ needs at those particular times will lead to success.