What would you do if you went into a restaurant and were offered the opportunity to pay what you wanted for your meal? Sounds a bit far-fetched, don’t you think? Well, think again. This may be a trend coming to a restaurant near you. Or not.
Hit by the recession and a decline in American tourism, a restaurant in one of Montreal’s historic areas instituted a new luncheon policy: Pay what you want.
“Desperate times call for desperate measures,”said George Pappas, owner of Taverne Crescent, a trendy establishment where patrons can dine for whatever they want to pay. Pappas felt he had nothing to lose, since the deepening financial crisis was keeping customers away. “Some people might pay nothing,” said Pappas, “but maybe when they have more money in three or six months, they’ll come back and pay more.”
The first time a restaurant tried this gimmick was 24 years ago, in London. At that point, Great Britain was going through an economic boom. Restaurateur Peter Illic decided to implement a “pay what you want”policy as an experiment. “Back then, people ended up on average paying more for the food than they would have done if the menu had been priced,”he explained. So Illic’s unique idea turned out to be a profitable gamble.
Now, more than two decades later, Illic has resurrected this marketing strategy at his Little Bay Restaurant in Farrington, although now, the economic situation is radically different. When he started his new trial in mid-December 2008, he noted, “People are paying a little less than the regular prices at the moment”
Allowing patrons to pay what they want is, well .. unheard of, and Illic’s restaurant has attracted quite a bit of attention because of this strategic business maneuver. Film and TV crews from Japan, Brazil, France and Mexico have converged on his restaurant, and newspaper articles have appeared in newspapers on at least four continents.
In the U.S., several non-profit restaurants exist with a “pay what you can”policy, but their format is more of a community meal center. The SAME (So All May Eat) Cafe in Denver requires a financial contribution of some kind from all their patrons, but if someone is strapped for cash, they are expected to donate an hour of their time working in the kitchen or another part of the cafe. Established in 2006, SAME modeled their business plan after a similar type of operation in Salt Lake City, which began serving meals in 2003.
Meanwhile back in Montreal, George Pappas is keeping his fingers crossed that he will be able to survive the lean economic times. Last year there were 336 restaurant bankruptcies in Quebec, a 20% increase over the previous year. And American tourism is not expected to increase anytime soon.
Whether this concept spreads to more restaurants remains to be seen. When you pay what you want for a meal, you also have to factor in that restaurants have other expenses besides the food, such as building rent, utilities, salaries cooks and service personnel. And what about tips for the servers? This is an interesting concept, to say the least, and we’ll be keeping our ear to the ground to report any updates.