A possible recession might be suitable comedic fodder for Campusfood.com’s marketing department, but it’s anything but funny to East Lansing businesses.
Campusfood.com recently began offering “Recession Specials” on its Web site, which marketing director Julie Shimshack said was a tongue-in-cheek method to encourage sales.
“During the past couple of weeks there has been lots of not-so-fun news going around, so we thought it would be good to put a spin on it,” Shimshack said.
MSU economics professor Charles Ballard said smaller restaurants are caught in a “double squeeze” caused by the recession and rising input costs. He said a recession tends to decrease demand for products, which would lower prices and revenues at restaurants.
“If they can pass that price increase onto the customer, that could cushion the blow,” Ballard said. “But small businesses operate in competitive markets, and it’s difficult to do that.”
Habib Jarwan, owner of Bell’s Greek Pizza, 1135 E. Grand River Ave., said East Lansing small business owners have struggled to adapt to rising input prices, which has made recession sales depressing.
“I speak to my suppliers who have contact with everyone in town, and they tell me everyone is hurting, small businesses especially,” he said. “The profit margin is very low these days.”
Shimshack said Campusfood.com participants have increased weekly sales from anywhere between 50 and 300 percent.
Jarwan said those numbers don’t tell the whole story. Each restaurant pays a fee to Campusfood.com to join its service, and since most orders are purchased with a credit card, credit card fees also have a negative impact on profits.
Jarwan’s location engaged in a weekly Campusfood.com special once before. He said the special generated about $1,500 more in sales, but profits were negligible given rising costs and credit card and Campusfood.com fees.
“Everything is expensive, but these specials are the only way to attract business,” Jarwan said. “Everyone offers pizza, but everyone is looking for a special price.”
Shimshack said the specials will continue until the end of the semester, and said she wants to remain optimistic about the economy’s situation.
“One of the things we did for it in the graphics is we have the arrow pointing up as opposed to down,” she said. “We put a little bit of a positive spin on something not so positive.”
Jarwan said he wishes he could be sure there would be an economic upswing.
“We have to keep breaking even to keep going,” he said. “Hopefully we will have a better economy in the future, but I don’t know. I’m hoping.”
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