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Aruba, September 18, 2014 - If you’ve been noticing a lot of restaurant promotional deals recently, you aren’t imagining things—it’s a real phenomenon. The restaurant business falls off a cliff when Labor Day hits, the summer ends, and kids go back to school. That’s why all those companies have to start offering deals to fill the gap. That all-you-can-eat Never Ending Pasta Pass from Olive Garden (DRI) isn’t a gimmick: It’s part of a real business strategy backed by hard data.
Look at the chart below: The amount the average customer spends at casual dining establishments is worse now than at any other time of the year.
Matt Drewes, ‎senior vice president for national restaurant partnerships at Cardlytics, says that with the start of the school year, “families are dining at home more and not going out as much,” in part to save money for new clothes and school supplies. “Restaurants take the hit from everybody else who makes money in back-to-school [time],” he says.
In the past decade, Labor Day has signaled a significant drop in the frequency of visits to restaurants. On the whole, the bigger chains have been able to combat that by offering promotions aimed at luring customers back—even if that means lower average prices. Their deals are designed to last only through those few weeks of softness. Notice the Endless Shrimp deal at Red Lobster goes from Labor Day until Nov. 2. And that Never Ending Pasta Pass only lasts seven weeks—Sept. 22 through Nov. 9. You can expect to see all-you-can-eat ribs, all-you-can-eat pancakes, 2-for-$20 deals, and other fixed-price promotions. “The bigger chains want to advertise an attractive price point and highlight in their commercials how families and larger groups of people should come out,” Drewes says. “They have created promotional events to fill the gap of fewer customers.”