3 Things You Should Know About Small Business: September 6
NEW YORK (TheStreet) -- What's happening in small business today?
1. LivingSocial's Starbucks daily deal a record. Daily deal site LivingSocial's offer for 50% off a $10 Starbucks (SBUX) virtual gift card has been the best-selling deal of all time, according to a Mashable article.
The offer ran on Wednesday and was sold out by 11 p.m. ET, with 1.5 million gift cards in total sold. This was the first time Starbucks had offered a gift card discount through a daily deals site, says Mashable.
The previous record holder was LivingSocial's offer for 50% off a $20 Amazon (AMZN) gift card in January 2011.
2. Summer drought forces tough pricing decisions on restauranteurs. This summer's drought, the worst in decades, has affected 88% percent of America's corn crop, a staple in many food and drink items. The skyrocketing price of corn will have a direct impact on restaurants as costs increase for many core menu items, even those high fructose corn syrup-laced soft drinks.
QSR Magazine says while the rise in food costs is an unfortunate reality, cutting margins doesn't have to be part of that reality.
The good news is that all restaurants will be affected by this, therefore restaurants that make smart decisions regarding menu and pricing will have the advantage.
Restaurant executives and franchisors should consider testing three strategies to offset cost increases: a rise in prices, introducing new menu items and removing high-cost items, advises QSR Magazine.
While a blanket price hike may seem like the simplest way to go, it is an uncertain bet, especially with fickle customers. Consider testing selective price increases, such as a rise in chicken but not steak, to see how they fare. Different markets may respond to different raises.
Introducing new menu items that have lower food costs is another option. The last strategy is simply removing high-cost items from the menu, but executives should be sure these decisions don't erode customer frequency, the article says.