For consumers, coupons are a good thing. They can entice people to come in and sample special dishes and find two-for-one deals. But for the $70 billion casual-dining industry, the proliferation of restaurant coupons means something else. According to this USA Today article, restaurants like Ruby Tuesdays, Bennigan's, IHOP and Smokey Bones are all sending out coupons in newspapers and mailboxes in an attempt to lure in more customers. Typically, as the holiday season draws nearer, business picks up. But this year is different because of higher gasoline prices, the housing crisis and economic uncertainty. "This is one of the worst scenarios that I've seen in the 14 years I've covered the industry," says Lynn Collier, analyst at KeyBanc Capital Markets. "Consumers are the winners--we'll only see more of this."
Some of the toughest markets for casual restaurants are Michigan and Washington, DC, where Bennigan's is circulating coupons for $5 off meals of $15 or more.