Business and Economy
5:00 am
Fri April 4, 2014

Restaurants Closing due to Low Profits

Customers expecting a dining bargain are making it difficult for restaurants to stay in business.  Jessica Dunker, President and CEO of the Iowa Restaurant Association   composed of some six-thousand restaurants, says it’s increasingly common for customers to choose free water when ordering an entrée, depriving the business of beverage profits.  Dunker also says restaurants hoping to boost sales by offering deals such as Living Social or Groupon promotions are creating “Groupon addicts”. “One of the things that does hurt the independent restaurant, new or existing, is this move in the industry that everyone believes you can get a deal all of the time,” she adds.
Frugal customers combined with an already small profit margin are forcing many Iowa restaurants out of business.