In Harvard Law School’s newsletter ‘Negotiation’ I came across an interesting piece about David Burke Townhouse, an upmarket restaurant in New York City. The newsletter cites an article by Katy McLaughlin in NY Times (which I can’t locate on its website). In the month of May, David Burke Townhouse adopted a creative strategy to navigate economic downturn.
The article states
“…Imagine you’re celebrating a special occasion with friends at an upscale restaurant. Soon after you take your seats, the wine director introduces himself and hands you a list of high-end bottles of wine. You notice that the prices – all in the $200 to $600 range – have been slashed through with a red pen.
“The prices on our reserve list are negotiable tonight”, the wine director says. “Would you care to make an offer on a bottle?”……….”
Wine director of the restaurant reported that at least on five bottles per night the restaurant earned more than the reservation price (the minimum that the restaurant expected). It’s always been said that customer is always ready to pay a huge premium for additional prestige. Possibility of quoting a high price at a posh restaurant earns you get prestige. Well, the result was that while other upmarket restaurants in Manhattan experienced about 15% decline in revenues, David Burke Townhouse’s sales was down by only about 8%.
An interesting strategy indeed!!
Source : Negotiation; Vol. 12 No.8; August 2009. Harvard Law School.