There has been a ton of chatter recently about the plethora of deal sites around, and their viability in the marketplace. Bloomberg food critic Ryan Sutton and founder of The Price Hike has had enough of them. He recently founded The Bad Deal to highlight some particularly egregious "deals."
The Bad Deal is a smart and necessary site; HuffPost Food recently chatted with Sutton to learn more about what makes a bad deal, and how to avoid them.
What inspired you to start The Bad Deal?
I started The Bad Deal after I watched one of New York's worst restaurants sell an obscene amount of deals on Groupon. The offer was for At Vermilion, a Latin-Indian fusion joint I was certain would shutter after critics like me drop-kicked it in 2008. But when I started hitting refresh on the Groupon deal last month, I noticed that purchases for the At Vermilion vouchers were going through the roof. It was like watching Wile E. Coyote on a shoddy Acme Rocket; you know he's about to hit a brick wall but there's nothing you can do to stop the impending disaster. Vermilion sold over $17,000 worth of those deals in June, and nearly $50,000 back in November. So that was the wakeup call to me as a critic, that I couldn't ignore these deal sites anymore.
Right now, I believe a growing amount of people are getting more and more of their restaurant information from deal sites, which is the equivalent of canceling your subscription to The Washington Post and watching infomercials all day -- in other words; you're taking advice from paid salespeople instead of good journalists. There aren't enough checks and balances for deals; there isn't enough criticism. When a restaurant opens, it gets free publicity, then it receives proper reviews from the critics a month or two later. But for deals, they appear and disappear within the span of days, and sometimes hundreds of thousands of dollars have exchanged hands before a trustworthy source can say, hey, wait a minute, should you really be ordering a tasting menu for six at The Dog Food Emporium?
There has recently been a ton of backlash about the whole Groupon phenomenon -- what do you see happening with similar companies in the next few years? Is the market saturated? Or will people keep finding new ways to "save?"
For deal sites, I believe it's still the Friendster and Myspace era, so to speak; we haven't yet discovered the next Facebook -- Groupon's [impending] enormous IPO notwithstanding. I'm quite curious to see what Google Offers and Priceless Cities by MasterCard have up their sleeves. I've often said deal sites have the potential to do good. As we emerge from the Great Recession, there are still great restaurants with empty seats, and there are still consumers who want a taste of luxury without blowing an entire month's worth of disposable income on a single meal, and if deal sites can help them in a way that's informed, fair and transparent, I'm all for that. Unfortunately, many deal sites are flip, biased and opaque.
Do you think any deal sites are worse than others? Or are they all equal opportunity bad deals?
Deal sites often restrict your choice based on their own financial considerations rather than on sound editorial judgment; if that wasn't the case, deal sites would highlight great restaurants that don't offer deals. But deal sites aren't in business to educate you about great fine dining establishments any more than the George Foreman cookbook is in business to help you learn the intricacies of making good chicken stock.
I do have a pretty good feeling about Savored, which is like OpenTable.com, except you get 30% off for dining at mostly good restaurants (Le Cirque, SHO, etc). The service helps restaurants fill their books in the off-hours or on slow nights by giving consumers a deal. There are usually no menu restrictions and you don't have to pay in advance or worry about unused, $1,000 vouchers, because you make the reservations through Savored and those resies are just $10 a pop.
I'm also cautiously optimistic about Yipit.com, a deal aggregator whose founders, I hope, will soon realize that they'll make more money by not just linking to offers by Gilt and Thrillist, but by criticizing the bad offers that they link to. That's my public suggestion. Anyone can aggregate, but if Yipit.com takes my advice and includes serious, professional criticism of, say, Living Social and Daily Candy deals on their site, I think they could pull away from the pack.
What has reception been like -- have you gotten any pushback? Have any deal sites contacted you?
I've been overwhelmed by the positive reception. Sure there've been criticisms too, but I'm a big guy; I can take them and learn from them. Only one (big) deal site has contacted me since I started The Bad Deal. They asked for my resume to consider me for a job. I was like, really? But still, kinda flattering. It also gives me hope that deal sites themselves are interested in adding criticism. Well, either that or they're trying to co-opt me.
What I'm doing, and I mean this humbly and introspectively, is trying to push the envelope in terms of criticism, as I'm saying pretty tough things about restaurants I sometimes haven't visited, which is generally taboo in my profession. But if we critics want to influence the sales of lousy deals that sell out in days or sometimes hours, we're going to have to rely less on arguments that concern whether a dish was overcooked or undercooked, and more on the language of economics, statistics, marketing, psychology and transparency. We critics are fighting a difficult uphill battle here; when a deal site says: 70 percent off, that's a powerful thing. It sometimes takes me 300 words to dissect the deal and describe why those three words -- 70 percent off -- are a fallacy. The consumer prefers three simple words to 300 complicated ones. That's a big problem for the critic.
How do you evaluate value -- what makes a $400 meal worth it? Or, a $5 meal?
That's the $64,000 question. How do food reviewers and consumers assess value? I have a little analogy that helps. Say you're at a nightclub. The music is pretty loud (perhaps some early Jurassic Five), but it's great music, so you don't mind so much, right? Now let's pretend the music is awful -- Britney Spears' latest garbage. And the songs are just as loud, which makes the bad music even worse. So you ask the DJ to turn it down, which he does, and it's more tolerable, but it's still bad music. Same goes for restaurants -- good food takes the sting off high prices, resulting in a good value. That's why it's so hard to criticize the price of Per Se; the food is so lovely it's easier (if not quite easy) to forgive the cost. But the reverse is also true, lower food prices don't make bad food taste better, it simply makes the meal more tolerable. So the moral of the story is that lower prices and "good deals" won't solves the problems of a bad restaurant. Rather, a good restaurant is usually a good deal already. Pick a restaurant, not a deal, for the best value.
When should a customer be suspicious of a supposed deal? What are some red flags you've picked up on?
If there's fine print, there's a catch. And if the fine print is longer than the deal description itself, which it sometimes is (I've done comparative word counts), then there's something fundamentally wrong about the whole transaction. There are no catches or fine print on most restaurant menus, rather, the menus only list the dishes to be ordered and prices you'll pay for them. It's that simple.
Here's a trick: watch out for "false savings." Find a restaurant that has a 40% discount on its tasting menu through, say, Gilt City. Then call up the restaurant and ask the receptionist how much the tasting menu is, and if he answers that you can only get that menu through Gilt, then guess what, you're not really saving anything because the menu is probably never sold at full price, just like that LCD television is never sold at the MSRP.
Want more? Check out The Bad Deal, The Price Hike or follow Ryan @qualityrye.