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Owner of Drew’s Eatery on Groupon Deal: ‘It Was a Bad Choice’

By Patty Wetli | Friday, December 9, 2011

Drew's Eatery to open for last time on Saturday, Dec. 10. Credit: Patty Wetli

A day after announcing the closing of his vegetarian-friendly restaurant, Drew’s Eatery, 2207 W. Montrose Ave., owner Drew Baker has come to terms with the discount deals (Groupon and Living Social, among others) that hastened the demise of his business.

“I don’t have any hard feelings,” Baker commented to Center Square Journal. “In life we are given a lot of choices. I made the choice with the deals, it was a bad choice. I have learned and I am moving on.”

Writing on his Facebook page, Baker responded to concerned customers, “Truly I feel bad because I should have never done a deal. I fell into a trap of everyone else is doing it…. If I had listened to my practical side, I would be sitting in a much better place. Next time I will listen, I promise!”

Drew’s Eatery will open one last time, Saturday, Dec. 10, 11:00 a.m. – 6:00 p.m., thanking fans by serving up complimentary food and drinks (while supplies last) and selling raffle tickets, $5 each, for a chance to win Drew’s Wienermobile; money raised from the raffle will help Baker pay off his debts. Baker has also set up a PayPal account for patrons who can’t bid farewell on Saturday but would still like to donate.

As for what comes next, Baker posted to the Drew’s Eatery Facebook page: “I don’t have any immediate plans for the future. I hope to try and reflect and learn from my experience here at Drew’s, enjoy some holiday cheer, and then jump into my next project.”

Baker isn’t the first business owner burned by the discount deal trend, which he termed a “silent killer” in a note to customers. Restaurants, which make up nearly one-quarter of Groupon deals in the U.S., are particularly vulnerable to coupon catastrophes, due to their narrow profit margins. For example, in a typical half-price Groupon offering, where the customer might pay $25 for $50 worth of food, the restaurant only clears $12.50, the remainder goes to Groupon.

In a case of too much of a good thing, shops aiming to lure new business can be overwhelmed by a flood of customers attracted to a deep discount. A British baker recently lost nearly $20,000 in the case of a cupcake Groupon gone wild. Closer to home, as reported last year by Center Square Journal, LM Restuarant, 4539 N. Lincoln Ave., was forced to extend its Groupon deadline when it sold 2,700 coupons instead of the anticipated 1,500.

According to staff, 700 of the coupon-holders waited until just weeks before the deal’s expiration date to redeem their discount, a rush of reservations LM wasn’t able to accommodate in the time period allotted. Still co-owner Stephan Outrequin Quaisser remained positive about the experience. “We are here to make sure [customers] enjoy their experience at the restaurant, so we will do whatever it takes to rise above the occasion,” he told Center Square Journal at the time. “Anything that brings more people to the restaurant is a good thing.”

Despite the hazards, discount purveyors aren’t exactly lacking for clients. The same day Drew’s Eatery shuttered its doors, Tank Sushi, 4514 N. Lincoln Ave., offered a Groupon for half-priced sushi.

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  • Jen TenHarmsel

    It is definitely a dilemma for people like myself who buy Groupons and deals from Living Social.  They’re such good deals, on the customer’s end, but I know that those discount companies don’t have good models for the businesses they are “partnering” with.  It’s a tough choice – buy a Groupon and get a great deal, but think about the possibility that that small business will suffer, and in some cases like this one, have to close down.  

    • http://www.proservepr.com J. Nick Augustine, J.D.

      There are too many factors in business development, success and sometimes closings. Groupon isn’t a magic customer potion.

      • Ryan P

        Don’t feel bad about getting too good of a deal as a consumer. If a place is popular at prices that can sustain profit for an owner, it will stay in business. Besides, how many times have you tried a new place and decided to never go back? The owner doesn’t feel bad in that instance, he goes out of business!

        Groupon is essentially like buying advertising. Groupon reaches a very large audience of people, and restaurants can pay (with short term profit) to reach that large audience with the hopes of long term profit.

        Also, in the sun times article they said that he had not even made a profit in the 1.5 years prior to running the coupons “Baker, who runs his restaurant with one other employee, had broken even
        after a year-and-a-half in business, and decided to start offering
        discounts.”

        Further, the restaurant closed before the coupons were even finished running it seems. To me, and I’m not in the restaurant business, it looks like the value of offering a deep discount to new customers is in making sure those customers come back long term and pay full price. If you look at how a coupon campaign like this is in terms of making you money, you would want to see the results both during the campaign and in the months after, with the goal being adding new customers at full price long after the coupon deals that attracted them are over. How can you realize that long term value if you close up before the coupons are even done running?

        Now, none of that is an insult to the owner of this establishment. I ate there a few times, with mixed feelings. The food was never bad at its worst and at its best was delicious. But I’m not a vegan so the options to me in the area are quite large, I can grab a sausage at Gene’s or enjoy a larger variety of the same type of food at Hot Doug’s, just to name two standouts in the area.

        But the few times I ate at Drew’s, there was very limited traffic. I could’ve been there at off peak times, but I’ve also eaten at their neighbor, Apart Pizza, a few times as well, and the traffic there was noticeably larger.

        I don’t think his business failed because of Groupon or Living Social sites, those sites just did not save his business.

  • http://www.proservepr.com J. Nick Augustine, J.D.

    What did Groupon have to say about these complaints? I am a publicist and live in Lincoln Square. Part of my job requires me to also wear the investigative journalist hat (due to budget cuts and the unfortunate decline of print media). I think Groupon is wrongly blamed too many times without the opportunity to respond to one-sided complaints.

    • Sarah Dandelles

      I don’t read anyone blaming Groupon above, JNAJAD – it sounds to me as if Drew is blaming himself for choosing to do a Groupon deal. A statement from Groupon, in this case, is unnecessary. I feel for all businesses who have had to deal with the darker side of these 75% off deals. 

  • http://www.proservepr.com J. Nick Augustine, J.D.

    http://www.linkedin.com/in/rockya – see Rocky’s page. I just invited him to be a guest on Law Talk Radio. We will talk about Groupon and small business use and experience. I am sorry that Drew’s Eatery had a bad  experience, but this is an opportunity to start a dialogue and hopefully small business operators learn through collective intelligence.

  • https://www.detangl.com Jayz

    I would like to read some positive stories too where a merchant increased his sales and his business made a turn-around from near bankruptcy to roaring profits. I have never come across one. Is there any merchant who has benefitted from Groupon and can specifically pinpoint Groupon for bringing in loyal customers?

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