Wise for Some Restaurants, Coupons Are a Drain at Others

“Everyone and their mother is walking in the door with discount sites,” he said. Still, Mr. Murphy was taken aback by a conversation he had on the subway not long ago when another passenger recognized him from a television appearance. As they talked, the stranger mentioned that a friend of his had started a Web site that sold coupons for dining out. “Then he started pitching it right there,” Mr. Murphy recalled with amazement. “How many more of these can there be?”

With more than a dozen deal sites born each week, there is no end in sight. Groupon, BlackboardEats, VillageVines and hundreds of other ventures are hurling sales-force cadres at restaurant managers. The newbies join the venerable Restaurant.com as well as Open Table, Yelp, LivingSocial, Gilt City, DailyCandy, Thrillist and a host of others. Mike Scotese, an owner of the Grey Lodge Pub in Philadelphia, said he has rejected “15 different Groupon clones.”

Each site insists that its own proprietary Web gimmick will counter recession blahs with new-customer buzz while building repeat business. As millions of hungry bargain-hunters click on these dining deals, restaurant owners say it is unclear whether the great online social-coupon gold rush is the future of American eating or a new, faster way to go out of business.

“If you buy in, you may not make money,” said Mr. Murphy, who is the vice president of the New York City chapters of the New York State Restaurant Association. “Yet maybe you should be out there,” he added, because no restaurateur can bear being left behind.

Diners hardly seem conflicted. “When you’re trying to save money, a discount doesn’t hurt,” said Lauren E. LaRusso, 25, a graduate student in education at the University of Pennsylvania. “I assume that most of the other people at the restaurant don’t have coupons, and I feel good, that I’m a little smarter than them.”

And some sites seem to be prospering. Groupon rejected a $6 billion offer from Google and has its sights on an initial public offering that could value the company at nearly $25 billion. That figure strikes some analysts as overly optimistic, but Groupon’s cash flow (the company typically keeps half of revenue from coupons honored at participating restaurants) certainly looks enviable.

Many of the sites are leveraging their power by combining with social-networking powerhouses like Facebook and Twitter, and enhancing their usefulness with geographical overlays and mobile applications. Beyond the startups, legions of traditional brick-and-mortar businesses are jumping in, including The New York Times, which has announced it will offer daily e-mail deals, including some at restaurants.

The ones left struggling with this new math are the restaurateurs. As they run the numbers, the restaurateurs fall into several camps. The least conflicted are the cheerleaders.

“Our life changed after Groupon — we would do it again,” said Michele Casadei Massari, 35, an owner of two Piccolo Cafes in Manhattan. Groupon sells its online coupons for half their food value and then Groupon takes an additional 50 percent of the discount sales. On March 1, in a timed deal, Piccolo Cafe sold 1,142 coupons for $14 worth of food in 24 hours.

“You don’t make money on the deal,” Mr. Massari acknowledged, “but in the end we are even.”

That’s because “people spend more than on the coupon amount,” he said. “They’ve been ordering about double the $14 from us. And people usually bring other customers, who are paying full price.”

Beyond that, among those who are redeeming coupons, “80 percent have come back without a coupon,” he said.

Deal sites are catnip to restaurateurs because they purport to offer instant solutions to two enduring conundrums: how to get the word out when your place is new or (worse) no longer new, and how to fill seats on slow days and at slow times.