Doesn’t this happen every year?
January ‘sales’ have been a thing for some time, but this year the discounts are deeper than ever. The cost of doing business may never have been higher thanks to – among other things – last year’s PAYE and minimum wage hikes and stubborn price inflation, but operators are facing a stark choice between taking a big hit on margin or presiding over a worryingly empty dining room.
What sort of restaurants are offering these low prices?
Though most prevalent in the branded space, these deals span the sector, with everyone from QSR brands like Popeyes right through to multi-Michelin-starred restaurants getting involved. Tom Kerridge’s two-star Marlow flagship The Hand and Flowers is offering two courses for £25 (three for £32.50), while the one-starred Galvin La Chapelle in east London is offering a five-course menu and a glass of sparkling wine for £49. To put these prices in perspective, meat and fish mains from the latter’s regular à la carte menu are all well north of £40 and a Sunday lunch in Marlow’s finest will set you back £195. In the casual dining sphere, Las Iguanas, meanwhile, is offering six plates of tapas for £18.69 via Groupon, which works out at just over £3 per dish, and Beefeater is offering a range of mains ordered on weekdays for just £8, including fish and chips; steak, egg and chips, and its smothered chicken melt, which it says was its most popular dish of 2025. Perhaps the most notable deal this year is Gaucho’s £10 two-course lunch. As the Argentine-themed chain points out, that’s less than most grab-and-go options.
We’re guessing none of these menus involve lobster and white truffle…
Correct. But it doesn’t mean that January’s cheap menus are bereft of decent options. Billed as a thank you for a ‘wonderful’ 2025, Gaucho’s menu offers a choice of minestrone soup or mushrooms on toast to start, followed by one of three mains, including grilled chicken paillard with green salad, confit tomatoes and chimichurri; and haddock with spicy tomato and caper sauce and basil. Gaucho’s competitors, including Hawksmoor with its £19 steak and a side deal (plus £10 Martinis), Côte with its £15 two-course ‘Happiest Menu’, and The Ivy with its ‘affordable luxury’ £19.17 menu that references the year the first The Ivy launched, are also using discounts to pull people in – but are taking a more measured approach.
Surely, some restaurants are losing money on deals such as these?
Rachel Dobson, managing director of hospitality purchasing specialist Lynx Purchasing, says it would be ‘very difficult’ for a premium restaurant operator to make any sort of margin from a £10 two-course menu. “It’s nowhere close to the 70%+ GP that’s the industry norm, and once you’ve factored in staffing and overheads, you’d have to ask whether it’s worth even the cost of switching on the oven,” she adds. Accounting for VAT, Gaucho receives £8 net from each menu. According to Restaurant’s estimates, food costs alone are running at roughly £5 for the two courses, leaving the princely sum of £3 to cover labour, occupancy costs, utilities and central operating costs (among quite a few other things). The reality is that if guests have this and nothing else, Gaucho is making a considerable loss, although guests are encouraged to accompany their meal with a selection of £5 sides, including chips and mash – both high-margin products.
What about the QSR sector?
The major branded players are also duking it out with big discounts. Relatively new kid on the block Popeyes is offering a ‘Shatter Crunch Savers’ menu featuring 27 items starting at £1.99 (the titular Chicken Cruncher costs £2.49, or £4.99 with fries and a drink). McDonald’s, meanwhile, has launched its ‘Meal Deal Plus’, which includes either a Mayo Chicken burger or Cheeseburger, plus medium fries, a medium drink and a ‘bonus’ side for £5.59 – working out at less than £1.50 per item. None of these deals can compete with Ikea, however, which is no stranger to very cheap food deals. The Swedish furniture giant is offering dishes including sausage, mash and peas for just 99p, which barely covers the price of a Mars bar in some newsagents.
Are any other tactics being used to pull people in other than low-priced food?
Yes. Some operators are leaning into wellness. Five Guys is offering a bunless Lettuce Wrap with a Coca-Cola Zero Sugar for £10 and The Real Greek giving guests a free shot of olive oil on arrival (yes, really).