Happy hours can’t bring a smile

- April 17, 2023
| By : Tanisha Saxena |

Cafés and restaurants are offering happy hours more as a compulsion than choice as they struggle to attract customers

NO RESULT: Despite happy hours scheme, restaurants and cafes are living hand-to-mouth as online apps like Swiggy and Zomato have created a roadblock

On a Sunday afternoon, under a clear blue sky and crisp air, a bunch of college friends are taking a stroll off the C-Block in Connaught Place. They stop in front of a café, attracted by what’s written on a square-shaped blackboard that is placed on a stand.

The text on the board outside the café reads, “Happy hour. Buy 1, get 1 -Beer/whiskey/vodka.”

Chef Govind Bhushal Executive Chef & Managing Director, Dr Zombie where the above-mentioned offer was placed, says, “Happy hours is an attempt to make the restaurant/café pocket-friendly. I observe that most people who come to Connaught place are walk-in customers. They are either college students, tourists, or people who simply want to stroll around and see stuff. They don’t have enough money to spend on expensive food and drinks. Happy hours is then a strategy by which we try to incorporate all the people in the café.”

ADD ON: A customer trying food at Dr Zombie. The happy hours on drinks help in attracting customers to food as well

Dr Zombie is a theme-based café that serves a variety of cuisines including Asian, Chinese, Italian and Indian. The dining area is dimly lit with elegant and beautiful zombie wallpapers around the walls.

Bhushal further adds, “We have a different and attractive theme for people across age-groups who come and hang out. Yes, youngsters come more often because it is an Instagram-able place. In happy hours, we offer drinks for free. As of now, our happy hours are from 12pm to 11:30pm.”

Small cafes and restaurants suffer

The HoReCa (hotels, restaurants and cafés) segment is undergoing massive changes. While it is a good time to explore and flourish for the big outlets, the small ones are suffering. There’s competition like never before, and cafés/restaurants have to stand out. Lately, they have been coming up with various marketing strategies and happy hours is one of them. It is a creative set-up where the target is to reach those customers who have always wanted to come to the restaurant but couldn’t do so due to lack of enough disposable income.

In short, happy hours strategy is meant to rescue these small restaurants and cafes.

It is believed that if the idea is executed intelligently, it is bound to create profit for the business and also for those whose ship has been sinking but who want to remain afloat. However, it is not easy as lately, several barriers have emerged for the restaurateurs and café owners.

‘Nowhere Terrace BrewPub Café’ in Gurugram also runs a happy hours scheme at the café.

[caption id="attachment_35125" align="alignnone" width="600"] GRAND ENTRANCE: Attractive entry attracts crowd

Sameer Dhar, the owner of the café, elaborates on it, “Although every bar and restaurant is using it nowadays, but long ago, in 1999-2000, TGIF (Thank God It’s Friday) café was the one which introduced it and promoted it massively.That created an awareness among the customers, who used to fill in and place their orders before 8pm [when the happy hours ended].That also ensured the guests would stay back till 11 – 12 midnight.”

The objective of happy hours was primarily to enhance sales or footfall during lean hours. The basic assumption was that the guests will have food also with the drinks so that the restaurant can make some money and at least break even if not profit out of the entire process.

“Customers were also curious, and they could appreciate why they are being offered something for free. There was a healthy relationship between the customer and restaurant. But now the restaurants are going into losses. It has become a compulsion as customers always expect discounts,” he says.

Since things have changed nowadays, the happy hours are not working as well in the new era which is driven by aggregators.

“Now comes a new era that’s aggregator-driven, and the discounting is 24×7 with deals at nearby.com, eazydiner.com, dineout.co.in. Some fests offer 50% always, there are discounts on zomato payments and so on. Most of the outlets are bleeding because of this. Further, every outlet in the market will eventually have to offer happy hours not because of competition but because of expectation of the guests. So many have devised techniques for the same — they use two menus, one for happy hours with inflated prices and other for post happy hours,” shares Dhar.

Dhar says that the owners should know when to apply the happy hours and that they should decide it logically if they want to turn it profitable.

He also stresses on the fact that happy hours should ideally include free drinks or offers on drinks and not food items.

SELECT ITEM: Under the happy hours scheme, only drinks are made free of cost or on a discounted rate for the customers

“It is like buying a Coca Cola1 litre and getting 2litres. It is basically meant to increase your consumption. For example, people would have drinks which could be complimentary but at the same time, they can try a new food item and if they ask for more of it, restaurant owners can find out if they are liking it.”

Impact of discounts by Zomato and Swiggy

Pub owner Abhimanyu Rana of Route 04, Connaught Place, explains, “It is not an option to keep happy hours these days but a compulsion. The competition has left us with no other option. Food tech companies like Zomato and Swiggy have created a roadblock. Their offerings to the customers is one of the major reasons why we are running in losses. A few months ago, industry body National Restaurants Association of India (NRAI) noticed this problem and initiated an advisory to the online tech giants to make informed decisions because restaurants and cafés are already dealing with adverse impact of such wooing offers that they keep on adding on the application.”

He gives the examples of the tie-ups that Zomato and Swiggy have with restaurants.

“Zomato allows its partner restaurant or café to attract the audience by making heavy discounts and special deals. Moreover, the payment service is accessible and hassle-free. Swiggy also comes up with big discounts now and then.”

Another major player in Delhi which is offering happy hours is T.G.I. Friday’s of Rajouri Garden.

“Our core business is because of happy hours. It is a great strategy only if you know how and when to use it. By this, I mean the business eye that it requires to execute it in a way that it benefits the business as much as it benefits the customers,” says Sanjoy Roy, president and CEO.

At present, it is more of a compulsion because online players have stiffened up the competition.

“Earlier it was about coming up with good offers when we felt it was okay to do. But now it is like a double-edged sword as we have to not just offer the best discount [always] but also manage the business. The middlemen, i.e. the online platforms, should be given proper measures so that their schemes and offerings don’t affect business of restaurants and cafés. What happens is that if six people are offering good discount, then the seventh also has to give it.

PRIME LOCATION: Dr Zombie cafe is located in Connaught Place

“So, it is not like giving happy hours means that the restaurants want to attract new customers. Of course, when it started out say five years ago, the idea was to increase the clients. Now, it is more of a struggle and sacrifice, especially for the small ones who still haven’t recovered from the pandemic blues. It has become more of a compulsion,” shares Roy.

Matchbox in Hauz Khas village also offers happy hours to the customers. The pub is located in a posh space that offers vibrant night-life. Unfortunately, their own life is not as vibrant.

Mahavir Mohanty, owner of the pub, says, “In the pandemic, the business was already dead and now when things have picked up, normalcy still seems a dream. Hauz Khas village is anyway suffering as most of our businesses are in losses. It was once bustling with crowd, but now Hauz Khas village is desolate. People are moving to different places as restaurants and bars have sprung up in nearly all the areas. People no longer feel the urge to come specifically to Hauz Khas. In such a scenario, even offering happy hours seems of no use. The occupancy is less than 60% and the little business that’s left is the weekends only.”