Free Bagel Fridays at Noah's, from the Bee
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Retail Watch: Giveaways pay off for Sacramento-area stores
ShareThisPublished: Tuesday, Mar. 3, 2009 - 12:00 am | Page 7B
Free.
The word's got a nice ring to it, especially now when everyone seems to be watching their wallet.
Noah's Bagels likes the sound of it, too. The bagel-and-coffee chain with seven locations in the Sacramento area recently launched its Free Bagel Fridays and Free Coffee Mondays coupon promotions.
The idea, said Heath DeCausemaker, general manager at Noah's 19 and J Street location, was to lure new customers in difficult times. The items are offered until 11 a.m. on Fridays and Mondays through March.
"We want to see new faces in the restaurant and get business in a slower economy," DeCausemaker said.
Noah's joins a growing list of companies trying different ways to bring customers through the doors. Such promotions are becoming more common at quick-service eateries as the restaurant sector continues to struggle, said Bonnie Riggs, an industry analyst at Chicago-based retail tracker The NPD Group and author of a just-released report on restaurant performance.
Riggs said 23 percent of all restaurant traffic in 2008 was attributed to deal incentives, up 9 percent from 2007. One reason for in-store promotions: Companies are spending less on advertising.
"They've got to get people in the door trying their products, maybe incentivize them to come back," Riggs said. "In lieu of advertising, you've got to let them know what you're doing. It's another way of getting bang for the buck."
It's also a reaction to budget-conscious customers that Riggs hasn't before seen.
"Usually, when someone introduces a new product, they'll offer free items. But these are unprecedented times," she said. "In my 30 years' experience, I've never seen these kinds of measures where they're just giving away product."
The Noah's Bagels campaign follows similar promotions from Denny's, which offered free Grand Slam breakfasts, and IHOP, which gave away pancakes in exchange for a charitable donation.
Both companies said the giveaways were a success.
Officials at Noah's said its Free Bagel Friday campaign wasn't started in response to the furloughs state workers are now taking twice a month. But the promotion has helped business, said Kylie Hurn, assistant manager at Noah's on 19th and J streets.
The campaigns were announced Feb. 3. The first furlough day came just three days later, on Friday, Feb. 6. The entire day's take for Hurn's store was just $2,500.
"That first furlough Friday, business dropped a lot," she said.
Two weeks later, though, word had gotten out. On the second furlough day - Friday, Feb. 20 - the store did $3,700.
"The coupons definitely helped out a lot," said DeCausemaker. "We have a lot of regulars, but we've seen a lot of new people and people we haven't seen in a long time."
The coffee and bagel promotions have helped increase sales of other items, Hurn said.
"It's a pretty easy upsell," Hurn said. "Customers say, 'We're already here, why not get breakfast?'"
Mike Romano, executive vice president of Irvine-based retail tracker SmartReply, said the key will be whether the eateries can create long-term customers out of a short-term promotion, especially with deal-savvy shoppers.
"I don't know if this stimulates customer conversion," Romano said of the Noah's campaign. "It seems an attempt at that, but whether it makes it remains to be seen."
DeCausemaker said it's unclear whether Noah's offer will extend past March.
But it "gets people to come in and see the changes to our menu selection," he said. "If it continues to grow business, we'll continue it."
- Darrell Smith