The goal of Happy Hour (HH) is to fill the restaurant during slow periods (5pm-8pm) and attract customers who might stay for a more expensive dinner.
The danger: cannibalizing your sales. If your regular customers, who used to pay full price at 7 pm, are now coming to pay half price, you lose margin without gaining volume.
Calculate the profitability threshold of the offer. If you offer -50% on beer, you need to sell twice the volume just to achieve the same turnover (and even more to achieve the same value margin, as the production cost doubles for the same turnover).
Use HH for high-margin products (draft beer, basic cocktails, soft drinks) or impulse items. Avoid low-margin or complex-to-prepare products.
The “Loss Leader” technique: accepting to lose a little on an appletiser if it consistently triggers the sale of a platter or a high-margin dish. The overall average ticket must remain consistent.
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