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Ryan Sutton Explains Why He's Obsessed With Bad Deals

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Instead of asking Bloomberg critic Ryan Sutton to recount his worst shitshow, we asked him to explain why he bothered launching The Bad Deal, his crusade against the likes of Groupon, Gilt City, and the like. He wanted to interview himself, so we let him.

2011_08_amandashitshow.jpgSo it's shitshow week here at Eater, and we were wondering if you'd tell us about the worst deals you've seen. Have you ever heard of Amber on the Upper East Side or Mambo in the West Village? Nope. Yeah, well neither have I. They're just two random sushi joints. But Groupon ran a special on both last week, and they sold over $85,000 in California rolls, tuna rolls and other fake forms of sushi. That in itself is a travesty that the public wasted nearly $100K on average food because Groupon told them to.

And that collective $85,000 that could have been spent at say, 15 East, or Sushi Yasuda. There's a serious opportunity cost when deal sites promote the wrong eateries, which is to say good restaurants will suffer at the expense of mediocre ones. In fact, let me you tell a little story, just so we all understand how much of a shitshow this really is. Remember back in September of 2007 when Bon Appetit put The Little Owl's meatball sliders on the cover of the magazine? That was a watershed moment for giving national attention to a great neighborhood joint. It made getting into the Little Owl a pain, but it helped end the age of big-box Buddakan joints and it set the stage for the Torrisi Era of "smaller is better." It was the birth of the "local destination joint."

Now imagine if Bon Appetit, instead of The Little Owl, ran with a cover photo of some Kamakaze Kool-Aid Roll from Monster Sushi or wherever. Well, that's essentially what's going on here with Groupon, a national brand is giving national attention to a local joint that doesn't deserve it, and as a result, a lot of people's money is being misallocated. It's anti-economic. Groupon is the invisible hand of capitalism sucker punching good restaurants that deserve to succeed and helping out mediocre venues that deserve to fail.

So how do we stop it? We have to hit the deal sites back, and hit them back hard. That's why I started The Bad Deal, because daily deals don't have any major critical counterweight, nothing to consistently keep them in check. It’s a challenge for reviewers like me because we’re used to, say, visiting Del Posto four or more times over the course of a year. So the question is how can we find the time or the budget to review Del Posto’s $30,000 wedding? The wedding is a good example because it's the most extreme form of a pop-up. One day it’s there, the next day it’s gone, and someone has paid $30K and gotten married in between. That someone deserves critical perspective, not just on the food at Del Posto, but on the wedding deal itself. We critics have to think more creatively in our reviewing. We have to read the fine print, break down the math and prove whether a deal is worth it. If more and more Americans are learning about restaurants through deals, then we, the food writing community, are failing if we’re not consistently criticizing those deals.

But you're not just dissecting deals, you're critical of the whole industry. And that’s because the industry has serious structural problems. Let me continue the pop-up comparison. Reuters finance blogger Felix Salmon said pop-up restaurants create "manufactured scarcity." With deals the scarcity is even more manufactured, more fabricated because while a pop-up will inevitably close, a restaurant offering a deal, for better or for worse, will stay open. Problem is, the restaurant is not really going to run out of brunch, nor will it run out of dinner or lunch. The Siberian Tiger is an endangered species; the tasting menu is not. The restaurant will only run out of a set number of coupons that will be re-offered in a few months anyway. That's not scarcity. That's printing money.

Gilt City, more than anyone, likes to manufacture this false sense of scarcity by almost never linking to a restaurant's full menu, website, or even phone number. Gilt doesn't want you to know these restaurants exist outside of the deal. Gilt only wants you to know about the deal and whether the deal is sold out. So any argument about Gilt promoting customer loyalty goes straight into the trash bin. The only phone number Gilt City typically provides is of its own customer service department. I've called that number before, and the people who answer the phone are about as useful as a bag of sand in the desert. That's an epic fail for both the consumer and the restaurant.

It's like these deal sites are taking the art of dining out and turning it into a commodity. If dining out is democratic, spontaneous and transparent, then deals are authoritarian, pre-packaged and opaque. Dining out was once a simple task. You made a reservation, you arrived, you chose what to eat, you ate, you paid. Now, on Groupon or Gilt, you're signing a non-refundable contract and putting a full down payment, not for a private dinner party, but for a simple meal for two. You're signing a non-refundable contract to buy wine pairings even though the deal sites almost never tell you what or how many wines you're going to be drinking. You're signing a non-refundable contract whose fine print often exceeds the word count of the actual deal. Think of it this way: When was the last time you saw fine print on a restaurant menu (outside of "no photography")? Menus don't need fine print. Neither do you.

Even at the very high end, you're singing a non-refundable contract and that contract is restricting your choices. A recent DirtyDaddy deal offered dinner for two (with a car rental) at Blue Hill at Stone Barns for $926. Except you can't choose the more expensive $208 menu at Stone Barns, only the cheaper $148 menu—no substitutions allowed. Apparently, $926 in DirtyDaddy dollars doesn't get you that far in the real world. Too bad. You signed a contract.

Still, sometimes even high end consumers want to save money. These deal sites want to help the consumer in that regard. Isn't there something noble about that? There's a big difference between saving money and getting 50% off the $400 tasting menu at DIRT in Park Slope. You probably wouldn't have ordered the tasting menu at DIRT, and it probably didn't cost $800 before the discount. That's not saving money, that's spending money. Deal sites are bringing the disingenuous culture of electronics retailing to the restaurant industry, where heavy discounting in the norm and consumers won’t buy a tasting menu unless they know how much they’re saving over the manufacturer’s suggested retail price.

Groupon and Gilt want readers to find value in deals and fictional savings. But the value isn't in the deal; the value is in the food and service. I can actually see a future where consumers are so addicted to deals that every price on a restaurant menu will be crossed off Wal-Mart style and then there will be an alternate, cheaper price next to it, to show how much you're "saving."

Right now, Yipit.com, a rapidly growing New York startup, makes me think of that bleak future. Yipit aggregates deals from other Groupon, Gilt and elsewhere, but the problem is there's no real content. You just see a long list of deals and their supposed "worth" "discount" and "savings." There are so many value-added metrics for these deals that Yipit could be using: New York Times stars, Bloomberg stars, Michelin stars, Zagat. But instead Yipit relies on statistics provided by the deal sites. The guys who run Yipit are QUALITY people and I truly believe that they, more than anyone else, will soon realize that consumers want QUALITY criticism and content more than they want than "infomercial-style discount math."

You said you try to be mathematical in your deal criticisms. But sometimes, you're not really quantitative, you're just lampooning and satirizing. Yes, precisely, and I'm okay with that. That's because I'm not necessarily reviewing say, what I think about restaurant SQUID in Red Hook and their new Benton's-Cuttlefish milkshake tasting menu. I'm reviewing the deal and terms of the deal. And I'm not just fighting facts here; I'm fighting fiction, often in the form of false discounts and wine pairings that are never quantified by the deal site (making my investigative job a lot tougher).
—Ryan Sutton
· The Bad Deal [Official Site]
· The Price Hike [Official Site]
· All Shitshow Week 2011 Coverage [~ENY~]

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